McCormick's (MKC) near-term catalyst path is choppy as demand trends are yet to show meaningful signs of improvement amid concerns around cost inflation and the pending Unilever (UL) Foods transaction, UBS said in a research report emailed Friday.

McCormick's Q3 results exceeded Wall Street's expectations, with adjusted EPS of $0.86, up from $0.85 a year earlier. Net sales for the quarter ended Aug. 31 were $2.02 billion, up from $1.72 billion a year earlier.

With fiscal Q4 guidance indicating sustained volume pressure, UBS said it now expects a gradual improvement in consumer demand into fiscal 2027, driven by innovation, brand investment, and distribution gains.

Cost initiatives and modest volume leverage should partly offset pressure below the gross profit line, UBS said, adding that it expects fiscal 2027 EPS of $3.13.

The brokerage said it reiterated its neutral rating on the stock and lowered its price target to $48 per share from $52.

Price: 44.25, Change: +0.11, Percent Change: +0.25