Hold Rating for JM Smucker Amid Tariff Uncertainty and Hostess Integration Challenges

In a report released today, Robert Moskow from TD Cowen maintained a Hold rating on JM Smucker (SJM – Research Report), with a price target of $121.00.

Robert Moskow has given his Hold rating due to a combination of factors impacting JM Smucker’s business outlook. The uncertainty surrounding tariffs on the company’s coffee segment is a significant concern. Although management has observed better-than-expected elasticity in response to pricing adjustments, the tariffs are likely to intensify inflationary pressures, necessitating further price increases to maintain profitability. The exact financial impact of these tariffs is still uncertain, as the company is in the process of seeking an exemption.
Additionally, the challenges faced in integrating Hostess into Smucker’s operations have led to execution issues, affecting various functions such as order fulfillment and merchandising. These integration problems have contributed to a decline in the Hostess business, with sales and profits expected to decrease in the coming fiscal year. Despite these challenges, Smucker’s management is working on corrective actions and strategic innovations to stabilize and eventually grow the business. These factors collectively justify the Hold rating, as the company navigates through these transitional challenges.

Moskow covers the Consumer Defensive sector, focusing on stocks such as Vital Farms, McCormick & Company, and Freshpet. According to TipRanks, Moskow has an average return of 1.9% and a 46.22% success rate on recommended stocks.