Zacks Investment Research Downgrades J M Smucker (SJM) to Sell

J M Smucker (NYSE:SJM) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research note issued on Wednesday.

According to Zacks, “Smucker’s shares have underperformed the industry in the past three months, thanks to a dismal earnings surprise history. We note that the company’s performance in second-quarter fiscal 2019 was weighed down by negative impacts stemming from the divestiture of the U.S. baking business. This along with rising freight expenses and timing shifts in acquisition synergies compelled management to curtail outlook for fiscal 2019.  In fact, high freight costs marred profitability in the U.S. Retail Pet Foods unit in the second quarter, while lower net price realization weighed on performance of Coffee and International units. Further, interest and SG&A expenses have been high in the past few quarters, which is a concern. Nevertheless, the Ainsworth buyout is strengthening the pet foods unit and driving the top line. Additionally, management is on track with innovation and brand building to boost portfolio.”

Several other brokerages have also commented on SJM. Credit Suisse Group raised J M Smucker to a “hold” rating and set a $94.00 price objective on the stock in a report on Thursday, November 29th. Wolfe Research lowered J M Smucker from a “peer perform” rating to an “underperform” rating in a report on Wednesday, September 26th. ValuEngine lowered J M Smucker from a “hold” rating to a “sell” rating in a report on Wednesday, November 28th. Morgan Stanley dropped their price objective on J M Smucker from $100.00 to $98.00 and set an “underweight” rating on the stock in a report on Thursday, November 29th. Finally, Barclays reissued a “hold” rating and issued a $103.00 price objective on shares of J M Smucker in a report on Sunday, December 2nd. Five analysts have rated the stock with a sell rating, six have given a hold rating and four have issued a buy rating to the company’s stock. The stock has a consensus rating of “Hold” and an average target price of $117.33.

Shares of SJM opened at $100.83 on Wednesday. The company has a current ratio of 1.25, a quick ratio of 0.57 and a debt-to-equity ratio of 0.73. J M Smucker has a 12 month low of $96.13 and a 12 month high of $133.38. The company has a market capitalization of $11.63 billion, a price-to-earnings ratio of 12.60, a price-to-earnings-growth ratio of 2.15 and a beta of 0.38.

J M Smucker (NYSE:SJM) last issued its quarterly earnings data on Wednesday, November 28th. The company reported $2.17 EPS for the quarter, missing the consensus estimate of $2.29 by ($0.12). J M Smucker had a net margin of 17.59% and a return on equity of 12.03%. The business had revenue of $2.02 billion during the quarter, compared to analyst estimates of $2.05 billion. During the same period in the previous year, the business posted $2.02 earnings per share. The firm’s revenue for the quarter was up 5.1% on a year-over-year basis. Research analysts anticipate that J M Smucker will post 7.99 earnings per share for the current year.

In other news, SVP Jeannette L. Knudsen sold 1,500 shares of J M Smucker stock in a transaction that occurred on Monday, September 10th. The stock was sold at an average price of $110.74, for a total value of $166,110.00. Following the sale, the senior vice president now directly owns 26,224 shares of the company’s stock, valued at $2,904,045.76. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Insiders own 3.92% of the company’s stock.

Several large investors have recently modified their holdings of the company. Vanguard Group Inc. lifted its position in J M Smucker by 2.2% during the third quarter. Vanguard Group Inc. now owns 13,334,759 shares of the company’s stock worth $1,368,280,000 after buying an additional 293,331 shares in the last quarter. Morgan Stanley lifted its position in J M Smucker by 100.2% during the third quarter. Morgan Stanley now owns 842,732 shares of the company’s stock worth $86,473,000 after buying an additional 421,792 shares in the last quarter. Legal & General Group Plc lifted its position in J M Smucker by 6.7% during the third quarter. Legal & General Group Plc now owns 637,433 shares of the company’s stock worth $65,399,000 after buying an additional 40,093 shares in the last quarter. Kentucky Retirement Systems purchased a new position in J M Smucker during the third quarter worth approximately $899,000. Finally, Banco de Sabadell S.A lifted its position in J M Smucker by 37.7% during the third quarter. Banco de Sabadell S.A now owns 28,769 shares of the company’s stock worth $2,949,000 after buying an additional 7,877 shares in the last quarter. 79.44% of the stock is currently owned by hedge funds and other institutional investors.

About J M Smucker

The J. M. Smucker Company manufactures and markets branded food and beverage products worldwide. It operates in four segments: U.S. Retail Coffee, U.S. Retail Consumer Foods, U.S. Retail Pet Foods, and International and Away From Home. The company primarily offers coffee, pet food and pet snacks, peanut butter, fruit spreads, shortening and oils, baking mixes and ready-to-spread frostings, frozen sandwiches, flour and baking ingredients, juices and beverages, and portion control products.

See Also: Diversification

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