J. M. Smucker Company: Upcoming Earnings and Market Dynamics
Profit Expectations Amidst Market Challenges
The J. M. Smucker Company (SJM), based in Orrville, Ohio, is a major player in the branded food product sector in the U.S. and Canada. With a market capitalization of $10.9 billion, Smucker is particularly recognized for its renowned fruit spreads, such as Smucker’s jams and jellies. The company is set to reveal its fiscal third-quarter earnings for 2025 on Tuesday, February 25.
Projected Earnings Show Mixed Trends
Analysts predict SJM will announce a profit of $2.36 per share on a diluted basis, which is a decline of 4.8% from $2.48 per share in the same quarter last year. SJM has a strong track record, having exceeded Wall Street’s earnings per share (EPS) estimates in its last four quarterly reports. In the most recent quarter, its EPS of $2.76 was 10% higher than what analysts had expected.
Future EPS Outlook: A Small Dip Followed by Recovery
For fiscal 2025, the expected EPS is $9.89, slightly lower than $9.94 for fiscal 2023. However, projections indicate a rebound in 2026, with EPS anticipated to increase by 6.1% to $10.49.
Stock Performance: Struggling Against Market Forces
Over the past year, SJM stock has dropped by 19.9%, underperforming the S&P 500’s rise of 25% and the Consumer Staples Select Sector SPDR Fund’s (XLP) increase of 7.7% during the same period.
Challenges: Supply Chain and Cash Flow Issues
The decline in SJM’s stock price is attributed to difficulties in its coffee segment, exacerbated by increasing competition and ongoing supply chain issues. The company is also grappling with cash flow challenges, reporting reduced cash from operations and a lower cash balance, which raises concerns regarding future investments and the sustainability of dividends.
Sparking Interest: Positive Reaction to Recent Earnings
On November 26, after announcing its Q2 results, SJM shares rose more than 5%. This uptick followed an adjusted EPS of $2.76, which outperformed Wall Street’s expectation of $2.51, although its revenue of $2.3 billion aligned with forecasts. SJM anticipates its full-year adjusted EPS to fall between $9.70 and $10.10.
Analysts’ Sentiment: Cautious Outlook
Analysts currently hold a skeptical view of SJM stock, giving it an overall “Hold” rating. Among 14 analysts watching the stock, three recommend a “Strong Buy,” ten opt for a “Hold,” and one analyst suggests a “Strong Sell.”
Future Expectations: Analyst Price Target
The average price target set by analysts for SJM is $126.86, indicating a potential upside of 22.6% from its current trading levels.
On the date of publication, Kritika Sarmah did not hold positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For additional details, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
