Spice Stock Snags Fresh Highs After Upgrade

Credit Suisse lifted its rating on MKC to "outperform" from "neutral"

The shares of spice concern McCormick & Company Inc (NYSE:MKC) are up 3.8% at $172.30 after Credit Suisse raised its price target to $187 from $147, and upgraded the stock to "outperform" from "neutral." The brokerage firm expects MKC to be the biggest long-term beneficiary in its food sector coverage, and predicts a rise in sales as home cooking remains the popular choice amid the COVID-19 pandemic.

The stock earlier hit a new record high of $174.79 on the heels of an impressive rebound off its March 23, two-year low of $112.22. The equity is up 22.7% in the second quarter already, with support at the 20-day moving average capturing its early-May pullback before launching the stock even higher.

Coming into today, analysts were surprisingly bearish on MKC, with foursporting a "sell" or worse, and the remaining four giving out a tepid "hold" rating. Meanwhile, the 12-month consensus price target of $134.6 is a 22.6% discount to current levels. This could leave the door wide open for even more bull notes, going forward.

The options pits echo this sentiment. In the last 10 weeks, 3.26 puts have been bought for every call at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 95% of readings from the past year, meaning long puts are being picked up at a higher-than-usual rate.