J.M. Smucker (SJM) Company was founded by Jerome Monroe Smucker in Orrville Ohio, United States of America- where its headquarters are located – in the year 1897. It is a manufacturer of natural peanut butter, ice cream toppings, fruit spreads, shortening, beverages, coffee products, flour, baking mixes and other products in North America.
On Friday the 3rd of June 2016, shares of J.M. Smucker closed higher by 1.01% to $131.72 after the consumer and pet food company’s price target was raised to $143 from $137 at Deutsche Bank. Due to the boost in stock price target at Deutsche bank, analysts expect a growth in earnings and revenue for the fiscal 2016 fourth quarter.
The consumer and pet food firm maintained a “buy” rating on the Orrville, Ohio based company ahead of its fiscal 2016 fourth quarter financial report, due out Thursday before the market open.
$1.20 per share earnings are expected from the company by Deutsche Bank analysts, a penny more than the consensus and up from 98 cents per share for the same 4th quarter in the year 2015.
Compared with $1.45 billion, revenue of $1.74 billion is estimated in line with consensus and this represents a 20% year over year increase.
In a note released on the morning of Friday the 3rd, Deutsche Bank analysts wrote “We are encouraged by solid results in coffee, while cost savings appear to be on track with option of the above the current target.” They went further to add “We acknowledge challenges in mainstream pet but continue to view the broader category as attractive on a long-term basis.”
Earlier last week on Thursday the 26th of May in an initiated sector weight rating at an analytical agency, the analysts said J.M. Smucker is facing increased competition and has limited visibility. Analysts maintained a neutral stance on the consumer and pet food manufacturer because of “reduced visibility into FY17 around competitive headwinds in the dry dog food business.” The Orrville, Ohio based company still has upside potential to synergy targets and profitability related to last year’s acquisition of Big Heart Pet Brands, analysts said in the note that was released in the morning.
During the middle of May, shares of J.M. Smucker gained 0.06% to 127.16 after Credit Suisse issued a positive note about its out performance rate and $142 price target. There had been doubts and concerns about the consumer and pet food company because of its slowing revenue growth and whether it would need to reinvest its synergies back into the business for a revival.
In addition to this, J.M. Smucker’s coffee business continues to benefit from lower coffee costs, but there are risks to Earnings before Interest and Taxes (EBIT) growth in fiscal 2017 after the successful introduction of Dunkin’ K-Cups (DNKN).
J.M. Smucker has a robust revenue growth with reasonable valuation levels, expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. But despite all these possible attributes, the company has had a somewhat disappointing return on equity.