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Why J.M. Smucker's Fiscal 2Q18 Results Could Be Disappointing

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Part 5
Why J.M. Smucker's Fiscal 2Q18 Results Could Be Disappointing PART 5 OF 5

What Analysts Suggest for SJM Stock

Analysts remain neutral

Most analysts providing recommendations on J.M. Smucker (SJM) stock continue to have a neutral outlook. Moreover, a couple of analysts lowered their target price on SJM stock. Recently, Susquehanna reduced the target price on SJM stock to $110 from $122. Meanwhile, Jefferies dropped its target price to $130. Also, J.P. Morgan lowered its target price to $110 from $116.

J.M. Smucker continues to disappoint on the sales and profitability front, thus keeping analysts on the sidelines. The company is witnessing lower sales as volumes fall on account of sluggish demand, and increased competition is hurting the top-line growth. Also, the company’s margins remain pressured due to volume deleverage, an adverse mix, and increased commodity pricing.

What Analysts Suggest for SJM Stock

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Going forward, the company’s sales and EPS are projected to decline as lower volumes and increased costs are expected to remain a drag. Besides, rising competition from private label products and a decline in the company’s national food brands could dent the company’s financials.

Rating summary

About 61.0% of the analysts covering the stock recommended a “hold” on J.M. Smucker. Meanwhile, 22.0% provided a “buy” rating, and 17.0% rated it a “sell.” Moreover, analysts suggest a target price of $116.43 on SJM stock, reflecting an upside of 13.5% to its closing price of $102.60 on November 9, 2017.

In comparison, the majority of analysts have a “neutral” recommendation on Kellogg (K) and Hershey (HSY) stock. However, they remain positive on Conagra (CAG), Mondelēz (MDLZ), and Kraft Heinz (KHC) stock.

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