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JM Smucker (SJM)
NYSE:SJM
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JM Smucker
(NYSE:SJM)
59Neutral
Positive Factors
Coffee Segment Resilience
Management acknowledged better-than-expected elasticity in their coffee business from pricing they have taken so far.
Earnings Growth
The company still has a path to modest earnings growth in FY26, consistent with consensus estimates.
Valuation and Growth Potential
The company's valuation is considered too low given the visibility to continued momentum for Uncrustables.
Negative Factors
Execution Shortfalls
There are execution shortfalls across a wide range of functions in the Hostess business, leading to a decline.
Sales Decline and Supply Chain Issues
Sales growth was a bit weaker this quarter with organic sales down -1% vs. +2% last quarter, but much of this seems to have been driven by the supply issues in Pet Food that are now behind us, and guidance implies a modest increase in organic sales growth next quarter.
Tariff Impact
Tariffs are exacerbating underlying inflationary conditions and more than likely requiring additional pricing actions to protect profit dollars.
JM Smucker (SJM) vs. S&P 500 (SPY)
Market Cap
$11.97B
Dividend Yield3.85%
Average Volume (3M)1.20M
Price to Earnings (P/E)22.2
Beta (1Y)0.15
Revenue Growth7.07%
EPS Growth-181.54%
CountryUS
Employees9,000
SectorConsumer Defensive
Sector Strength78
IndustryPackaged Foods
Share Statistics
EPS (TTM)2.61
Shares Outstanding106,416,620
10 Day Avg. Volume1,030,697
30 Day Avg. Volume1,203,390
Financial Highlights & Ratios
PEG Ratio0.31
Price to Book (P/B)1.72
Price to Sales (P/S)0.00
P/FCF Ratio14.56
Enterprise Value/Market Cap1.65
Enterprise Value/Revenue0.58
Enterprise Value/Gross Profit5.69
Enterprise Value/Ebitda3.20
Forecast
1Y Price Target
$120.08Price Target Upside6.74% Upside
Rating ConsensusHold
Number of Analyst Covering14
JM Smucker Business Overview & Revenue Model
Company DescriptionThe J. M. Smucker Company manufactures and markets branded food and beverage products worldwide. It operates in three segments: U.S. Retail Pet Foods, U.S. Retail Coffee, and U.S. Retail Consumer Foods. The company offers mainstream roast, ground, single serve, and premium coffee; peanut butter and specialty spreads; fruit spreads, shortening and oils, and frozen sandwiches and snacks; pet food and pet snacks; and foodservice hot beverage, foodservice portion control, and flour products, as well as dog and cat food, frozen handheld products, juices and beverages, and baking mixes and ingredients. It provides its products under the Meow Mix, 9Lives, Kibbles 'n Bits, Milk-Bone, Pup-Peroni, Rachael Ray Nutrish and Nature's Recipe, Folgers, Café Bustelo, Dunkin', Folgers, Café Bustelo, 1850, Jif, Smucker's, Smucker's Uncrustables, Robin Hood, and Five Roses. The company sells its products through direct sales and brokers to food retailers, club stores, discount and dollar stores, online retailers, pet specialty stores, natural foods stores and distributors, drug stores, military commissaries, and mass merchandisers. Smucker Company was founded in 1897 and is headquartered in Orrville, Ohio.
How the Company Makes MoneyThe J.M. Smucker Company generates revenue through the sale of its diverse range of food and beverage products. Its revenue model is primarily based on the production and distribution of branded consumer goods across its key segments: consumer foods, pet food, and coffee. In the consumer foods segment, Smucker's earns money from the sale of spreads, toppings, and packaged food products. The pet food segment contributes significantly to its earnings through popular brands like Milk-Bone and Meow Mix, catering to the growing pet care industry. The coffee segment, led by brands such as Folgers and Dunkin', generates revenue through various retail and foodservice channels. The company also benefits from strategic partnerships and licensing agreements that enhance its brand visibility and market penetration. Additionally, Smucker's invests in marketing and innovation to maintain and expand its market share, contributing to its overall financial performance.
JM Smucker Financial Statement Overview
Summary
The JM Smucker company shows a mixed financial performance. While cash flow metrics are strong, reflecting healthy cash generation, the income statement reveals challenges with profitability and revenue growth. The balance sheet is stable, but profitability concerns may pose risks going forward. Strategic improvements are necessary to enhance revenue and net income stability.Income Statement
The company's gross profit margin for TTM (Trailing-Twelve-Months) is healthy but has shown volatility. Net income has turned negative, impacting the net profit margin significantly. Revenue growth is inconsistent, with a recent decline in revenue. EBIT and EBITDA margins have decreased, indicating a reduction in operating efficiency.55
Neutral
Balance Sheet
The debt-to-equity ratio in the latest TTM period shows improvement due to reduced total debt, enhancing financial stability. However, the company's return on equity has weakened due to negative net income. The equity ratio remains stable, indicating a solid equity base relative to total assets.60
Neutral
Cash Flow
Free cash flow has seen positive growth, and the operating cash flow remains robust. The operating cash flow to net income ratio is strong due to operating efficiency, despite negative net income. The free cash flow to net income ratio is favorable, indicating efficient cash generation relative to earnings.70
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 8.79B | 8.18B | 8.53B | 8.00B | 8.00B | 7.80B | Gross Profit |
| 3.47B | 3.12B | 2.80B | 2.70B | 3.14B | 3.00B | EBIT |
| 331.20M | 1.31B | 1.17B | 1.02B | 1.39B | 1.22B | EBITDA |
| 859.30M | 1.69B | 1.61B | 1.63B | 1.83B | 1.73B | Net Income Common Stockholders |
| -256.70M | 744.00M | -91.30M | 631.70M | 876.30M | 779.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 47.20M | 62.00M | 1.14B | 169.90M | 334.30M | 391.10M | Total Assets |
| 18.43B | 20.27B | 14.99B | 16.05B | 16.28B | 16.97B | Total Debt |
| 7.94B | 8.56B | 4.31B | 4.49B | 4.75B | 5.62B | Net Debt |
| 7.89B | 8.50B | 3.66B | 4.32B | 4.42B | 5.23B | Total Liabilities |
| 11.52B | 12.58B | 7.70B | 7.91B | 8.16B | 8.78B | Stockholders Equity |
| 6.91B | 7.69B | 7.29B | 8.14B | 8.12B | 8.19B |
| Cash Flow | Free Cash Flow | ||||
| 815.20M | 642.90M | 717.00M | 718.80M | 1.26B | 985.50M | Operating Cash Flow |
| 1.24B | 1.23B | 1.19B | 1.14B | 1.56B | 1.25B | Investing Cash Flow |
| -121.90M | -3.96B | 262.60M | -355.50M | 311.10M | -271.50M | Financing Cash Flow |
| -1.11B | 2.14B | -964.60M | -944.50M | -1.94B | -688.70M |
JM Smucker Technical Analysis
Neutral
112.50
Price Trends
114.07
Negative
109.93
Positive
112.55
Negative
Market Momentum
-0.53
Positive
45.02
Neutral
10.93
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SJM, the sentiment is Neutral. The current price of 112.5 is below the 20-day moving average (MA) of 114.87, below the 50-day MA of 114.07, and below the 200-day MA of 112.55, indicating a bearish trend. The MACD of -0.53 indicates Positive momentum. The RSI at 45.02 is Neutral, neither overbought nor oversold. The STOCH value of 10.93 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SJM.
JM Smucker Risk Analysis
JM Smucker disclosed 31 risk factors in its most recent earnings report. JM Smucker reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
JM Smucker Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $10.98B | 9.12 | 36.53% | ― | 2.35% | 145.82% | |
70 Outperform | $29.84B | 11.97 | 27.37% | 4.40% | -2.62% | 4.27% | |
68 Neutral | $11.02B | 33.79 | 3.67% | 6.06% | -3.15% | -65.38% | |
68 Neutral | $33.32B | 12.76 | 5.36% | 5.70% | -4.25% | -4.04% | |
66 Neutral | $10.53B | 20.34 | 13.43% | 4.30% | 9.15% | -31.94% | |
64 Neutral | $8.72B | 14.80 | 5.05% | 174.27% | 3.54% | 3.26% | |
59 Neutral | $11.97B | 22.22 | -3.55% | 3.85% | 7.07% | -181.54% |
* Consumer Defensive Sector Average
Performance Comparison
SJM
JM Smucker
112.50
1.65
1.49%
CPB
Campbell Soup
35.94
-8.48
-19.09%
CAG
Conagra Brands
23.31
-6.13
-20.82%
GIS
General Mills
54.84
-13.35
-19.58%
PPC
Pilgrim's Pride
46.31
12.20
35.77%
KHC
Kraft Heinz
28.15
-6.33
-18.36%
JM Smucker Earnings Call Summary
Earnings Call Date:Feb 27, 2025
(Q3-2025)
| % Change Since: 3.06%|
Next Earnings Date:Jun 10, 2025
Earnings Call Sentiment Neutral
The earnings call revealed strong performance in key brands like Uncrustables and Café Bustelo, along with increased earnings guidance and a strategic debt reduction plan. However, challenges such as supply chain disruptions, significant impairment charges in the Sweet Baked Snacks segment, and inflationary pressures on consumer spending were notable. While positive strides were made in brand growth and financial guidance, the negative impacts were considerable, making the sentiment balanced.Q3-2025 Updates
Positive Updates
Uncrustables Brand Growth
Net sales for the Uncrustables brand grew by 15% in the quarter, driven by national advertising, distribution gains, and new merchandising investments. The brand is expected to exceed $900 million in net sales this fiscal year.
Café Bustelo Sales Increase
Café Bustelo brand grew net sales by 15%, continuing its momentum of double-digit growth. The brand gained dollar and volume share in all segments it competes in.
Increased Earnings Guidance
The company raised its full-year adjusted earnings per share guidance to $10.00, reflecting improved gross margin expansion and earlier than anticipated synergies.
Debt Reduction Plan
The company plans to prioritize debt reduction by paying down over $800 million this fiscal year and $500 million annually in the next two years.
Negative Updates
Supply Chain Disruptions
Supply chain disruptions negatively impacted results, particularly in the U.S. Retail Pet Foods and Milk-Bone brands, causing a $30 million impact in the third quarter.
Sweet Baked Snacks Segment Challenges
Net sales decreased 8% for Sweet Baked Snacks, driven by declines in snack cakes and private label products. The segment also faced a $794 million impairment charge related to goodwill.
Impact of Inflation and Consumer Spending
Consumers continue to be selective in their spending due to inflationary pressures, affecting the sweet baked goods category and causing slower recovery than anticipated.
Decrease in Comparable Net Sales
Comparable net sales decreased 1%, reflecting a 5 percentage point decrease from volume mix, primarily driven by decreases for coffee and dog snacks.
Company Guidance
In the third quarter of fiscal year 2025, The J. M. Smucker Company experienced a slight decrease in net sales by 2%, with comparable net sales down by 1% as a result of supply chain disruptions and divested businesses. However, the company increased its full-year guidance for adjusted earnings per share to a range of $9.85 to $10.15 and raised its free cash flow projection to $925 million. The Uncrustables and Café Bustelo brands both saw notable 15% net sales growth, while the Milk-Bone brand faced supply chain challenges but is expected to recover in the fourth quarter. The Sweet Baked Snacks segment underperformed, leading to a $794 million goodwill impairment charge and a $208 million trademark impairment charge. Despite these challenges, adjusted earnings per share rose by 5% to $2.61, driven by improved gross margins and disciplined cost management. The company also anticipates a 7.25% increase in full-year net sales, factoring in the Hostess Brands acquisition and strategic pricing actions, particularly in the coffee segment.JM Smucker Corporate Events
Executive/Board ChangesShareholder Meetings
JM Smucker Promotes John Brase to President and COO
Neutral
Apr 30, 2025
On April 30, 2025, The J.M. Smucker Company announced the promotion of John Brase to President and Chief Operating Officer. Brase, who has been with the company since 2020, will continue to oversee various segments and expand his role to include external engagements. The company also awarded special equity awards to Brase and CFO Tucker Marshall to ensure business continuity. Additionally, the Board approved amendments to the company’s regulations, removing the requirement for the President to be a director and updating shareholder meeting procedures.
Spark’s Take on SJM Stock
According to Spark, TipRanks’ AI Analyst, SJM is a Neutral.
The JM Smucker Company shows a mixed outlook. Strong cash flow and positive technical indicators provide some strengths, but profitability issues and a negative P/E ratio are significant concerns. The company’s efforts in brand growth and strategic debt reduction are promising, but challenges in profitability and valuation weigh down the overall score.
To see Spark’s full report on SJM stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.