Can J.M. Smucker Report Improved Fiscal 3Q18 Earnings?

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Part 5
Can J.M. Smucker Report Improved Fiscal 3Q18 Earnings? PART 5 OF 5

J.M. Smucker: Analysts’ Recommendations and Target Price

Analysts maintain a neutral view

The majority of analysts maintained a neutral view on J.M. Smucker (SJM) stock. The company’s sales are expected to gain from its focus on merchandising, new product launches, and price restructuring. 

However, this growth is likely to be moderate, as challenges in its Retail Consumer Foods segment and increased competition from private label players are expected to remain a drag.

J.M. Smucker: Analysts&#8217; Recommendations and Target Price

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J.M. Smucker’s (SJM) bottom line is expected to grow, driven by increased cost savings and anticipate moderation in green coffee costs. The lower effective tax rate should further cushion its EPS (earnings per share). However, pressure on margins from increased raw material prices and higher logistics could restrict the company’s bottom-line growth rate.

Of the analysts covering J.M. Smucker stock, 59.0% recommend a “hold,” 23.0% suggest a “buy,” and 18.0% recommend a “sell” rating. Analysts recommend a target price of $128.27 on SJM stock, which reflects an upside potential of 7.0% when compared to its closing price of $119.83 on February 7, 2018.

Peer comparisons

Analysts also maintain a neutral view on other major packaged food manufacturers in the US. This underperformance was due to the sales front over the past several quarters. 

Pressure on these margins continues to subdue the industry’s growth. The majority of analysts have “hold” ratings on Kellogg (K), General Mills (GIS), Campbell Soup (CPB), and Hershey (HSY).


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