J.M. Smucker (NYSE:
) is expected to report first-quarter earnings on Friday, August 17
before market open. Analyst consensus expects the company to report
earnings per share (
) of $0.99 on revenue of $1.3 billion.
upgrade to Buy
at Goldman Sachs led shares of the company to cross the 200-day
moving average, exchanging hands at $78.37 before closing at $77.91
- up 1.58 percent from Friday's close.
Not Just Jelly: The Company and Recent M&A
J.M. Smucker's portfolio
includes household brands Pillsbury, Millstone coffee, Knott's,
Folgers, Hungry Jack, Jif and Crisco. Smucker acquired Jif and
Crisco from Proctor & Gamble (NYSE:
) in 2002 and Folgers in 2008. The company manufactures and markets
a wide variety of produce products in the United States and
J.M. Smucker busied itself in Q1, acquiring a majority of
Sara Lee Corporation's spun-off
food service, hot beverage and coffee business in January as well
as staking a 25 percent equity interest in China oat products
manufacturer Guilin Seamild Biologic Technology Development in
Earlier in 2011, J.M. Smucker acquired Rowland Coffee Roasters
for $360 million.
boosted its dividend
in July by around 8 percent from $0.48 to $0.52.
Goldman Sachs' notable upgrade Monday, based on "best-in-class"
shareholder return, end-user growth for company brand demand and
"advantaged cost profile," caused the investment bank to raise its
price target for J.M. Smucker from $85 to $90 in addition to the
In the report, Goldman Sachs stated, "SJM's input cost outlook
remains favorable given high coffee and peanut exposure - an
attribute that is becoming increasingly scarce. And its heavy
exposure to the coffee category's secular premiumization trend
offers a sustained sales growth advantage. . .The combined cost and
demand dynamics fuel our above consensus estimates this year and
Deutsche Bank reiterated its Buy rating on J.M. Smucker in a
report published Monday, stating that the agency expects,
"sequential improvement" through factors including new consumer
products and lowered prices.
"At the start of 2012, we pointed to Smucker as our 'top pick.'
With inflation and weak volume, our conviction has been tested. But
as time passes, we continue to believe moderating inputs (primarily
coffee), volume recovery, productivity, solid balance sheet and
6-7% C2013 FCF yield point to the shares as undervalued."
The two reports were notably bullish for the company.
Of thirteen surveyed analysts covering J.M. Smucker, six have a
Hold rating on the company and seven provide a Buy or equivalent
Shares of J.M. Smucker closed down 0.33 percent year-to-date
(YTD) at Monday levels and up more than 4 percent in the past 52
weeks. The company has a market cap close to $8.6 billion and
price-to-earnings ratio near 19.35 at current levels.
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