Megan Alexander, an analyst from Morgan Stanley, maintained the Buy rating on JM Smucker. The associated price target was lowered to $115.00.
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Megan Alexander’s rating is based on several strategic factors that position JM Smucker for potential growth. The company is absorbing significant tariff-related costs without increasing prices, which is balanced by benefits from elasticity and stricter SG&A management. Management has reiterated the potential for above-algorithm EPS growth by FY27, driven by tariff removal and anticipated savings on interest expenses, creating a clear path to growth.
Additionally, there are expectations for improved performance in various segments, including Pet, Frozen Handheld & Spreads, and Hostess, with early signs of improvement already noted. Despite some uncertainties, such as the narrow breadth of OSG performance and limited visibility into the coffee segment’s future, the risk/reward profile remains attractive. The company is one of the few in the food sector showing positive OSG, with a more tangible bridge to EPS growth following tariff relief, although broader momentum beyond coffee is necessary for the stock to perform well.
In another report released yesterday, Wells Fargo also maintained a Buy rating on the stock with a $120.00 price target.
Based on the recent corporate insider activity of 29 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SJM in relation to earlier this year.