MKC
McCormick & Company, Incorporated
$47.80
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 30.2% below fair value
You pay
$47.80
Bear
$56.42
Fair
$68.51
Bull
$80.59
Bear
$56.42
+18.0%
$3.91 × 14x P/E
Fair
$68.51
+43.3%
$3.91 × 17x P/E
Bull
$80.59
+68.6%
$3.91 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
12.2x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $73.20 from 30 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $68.51 per share.
Warnings
The company's reported profits differ from official accounting profits by 33%. Check what costs are being left out of the adjusted number.
Dividend-based valuation: $80.02 (above our primary estimate by 20%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples