UPDATE: Credit Suisse Reiterates Neutral Rating, Raises PT on McCormick & Company, Incorporated on Signs of Stabilization

In a report published Wednesday, Credit Suisse analyst Robert Moskow reiterated a Neutral rating on McCormick & Company, Incorporated (NYSE: MKC), and raised the price target from $72.00 to $77.00.In the report, Credit Suisse noted, "1Q EPS of $0.70 handily beat our estimate by $0.07 and grew $0.08 over the prior year with volume and Mexican JV results both well above internal expectations. The quality of the results was less than stellar (op income down 2% and gross margin down 80 bps), but the company appeared to stabilize many of the weak spots that we thought would cause downward earnings revisions. Specifically, Americas Consumer sales grew 5% including better results at Wal-Mart, and Industrial sales in China recovered strongly due to strong new product "wins" and exports to nearby Asian countries. In addition US competitors raised prices in response to McCormick's ‘weight-outs' to cover raw material inflation, thus assuaging our concerns about price gaps in the value segment of the category. With visibility improving we are raising our EPS estimate to the high end of management's constant currency guidance (up 8%), although lowering it optically by $0.04/sh to account for an additional $0.07 of currency headwind. We are raising our target price to $77, reflecting a 20x P/E (versus the group at 18.7x) against our one-year forward EPS estimate."McCormick & Company, Incorporated closed on Tuesday at $75.12.