Opinions
Stan Wong
J. M. Smuckers Co.
SJM-N
SELL ON STRENGTH
Jun 12, 2025
$96.160
Stock price when the opinion was issued
food processing
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BUY ON WEAKNESS
Stockchase Research Editor: Michael O'Reilly The company best known for jam, also provides pet foods, coffee and much more. Its recent earnings were so strong the company has increased its guidance for 2021. Management projects $8.20-$8.60 EPS, up from $7.90-$8.30 for next year. Recent earnings of $2.37 per share beat estimates of $1.67. This caused share prices to pop recently, so we would be looking to buy on a pullback towards $115. It pays a good dividend with a 51% payout ratio. Yield 2.96%
food processing
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TOP PICK
Stockchase Research Editor: Michael O'Reilly We are being rewarded for our patience as this was a buy on weakness target. The company best known for jam, also provides pet foods, coffee and much more. Its recent earnings were so strong the company has increased its guidance for 2021. Management projects $8.20-$8.60 EPS, up from $7.90-$8.30 for next year. Recent earnings of $2.37 per share beat estimates of $1.67. It pays a good dividend with a 51% payout ratio. We would buy this with a stop-loss at $103. Yield 3.06% (Analysts’ price target is $117.40)
food processing
DON'T BUY
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PARTIAL BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research
SJM is a $10B company with a cheap valuation of 10.3X forward earnings, a high yield of 4.6%, but forward earnings growth for FY2026 is expected to decline about 9%. Analyst earnings estimates dropped significantly following its latest results, as it is seeing declining volumes, higher input costs, and it raised prices to protect margins, but consumers are trading down. Due to these concerns, it is expected to see margin compression in the coming year(s). Its valuation has been compressing over the past decade, and for an income investor, we think it is OK and can eventually recover, but we would not be overly interested in the name here.
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food processing
Packaged treat business in general is challenged. Aside from tariffs, input costs are rising around the world due to normal inflation over the years. Growth rate's weaker than what he looks for. Only 3.3% earnings growth rate, though PE is cheap at 10x. Below 200-day MA, and moving lower. Value stocks can always get worse.
Showing 25 RSI, indicating oversold. Wait to see if it recovers. If he held it, he wouldn't 6-18 months from now. Nice yield of 4.5%, should be fairly safe.