JM Smucker (SJM – Research Report), the Consumer Defensive sector company, was revisited by a Wall Street analyst today. Analyst Alexia Burland Howard from Bernstein reiterated a Hold rating on the stock and has a $104.00 price target.
Alexia Burland Howard has given her Hold rating due to a combination of factors impacting JM Smucker’s current and future performance. The company’s recent quarterly results showed a slight decline in sales growth, attributed to supply issues in the Pet Food segment, although these issues are reportedly resolved. Despite this, the company faces challenges with rising coffee input costs, which could affect profitability in the upcoming fiscal year. Additionally, there is uncertainty regarding the ongoing weakness in sweet snacks sales, which could be a temporary issue or a sign of changing consumer preferences.
Furthermore, while the company experienced a slight miss in revenue expectations, it managed to exceed earnings per share estimates due to strong margins and a lower tax rate. However, the analyst has adjusted the valuation metrics slightly downward, reflecting the uncertainties in the coffee commodity markets and a slightly reduced EBITDA forecast. These mixed factors contribute to the Hold rating, suggesting that while there are positive aspects, there are also significant uncertainties that investors should consider.
In another report released yesterday, Barclays also maintained a Hold rating on the stock with a $123.00 price target.