What Made J.M. Smucker’s Stock Rally 15% since 4Q16 Results?



Stock rose since last quarter

The J.M. Smucker Company (SJM), a food and beverage company based in Orrville, Ohio, will release its fiscal 1Q17 earnings on August 23 before the market opens and will also conduct a conference call to discuss the results. The company has shown tremendous growth in its stock price since last quarter’s results. The company’s stock has risen by 15% since then after it reported an excellent fourth quarter and a strong end to its fiscal 2016.

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On August 17, 2016, SJM closed at $153.2, a rise of 15% since it reported its fiscal 4Q16 results on June 9, 2016. The company’s stock reacted positively to its fiscal 4Q16 results and increased by 8% on the same day. Its fourth quarter earnings results showed a 45% rise in its earnings and a 25% rise in revenue. Both earnings and revenue also beat analysts’ estimates.

So far, the stock has risen by 25% in 2016, and it increased 23% in 2015. J.M. Smucker has outperformed the market, represented by the S&P 500 Index, by 17% as of August 17.

Peers’ stock performances

So far in 2016, Smucker’s peers in the processed and packaged goods industry have also shown positive stock price performances.

  • ConAgra Foods (CAG) has returned 11%.
  • Mondelez International (MDLZ) has returned -2%.
  • Campbell Soup (CPB) has returned 17%.

ConAgra Foods, Mondelez International, and Campbell Soup closed trade at $46.1, $42.9, and $60.4, respectively, on August 17, 2016.

The Guggenheim S&P 500 Equal Weight Consumer Staples ETF (RHS) invests 2.8% of its portfolio in J.M. Smucker. It also invests 2.6% in ConAgra, 2.6% in Mondelez International, and 2.6% in Campbell Soup. So far, it has returned 9% in 2016.

In this series

With J.M. Smucker’s fiscal 1Q17 earnings release due next week, we’ll discuss what investors can expect in the earnings release. We’ll cover analysts’ revenue estimates, revenue growth drivers, and earnings per share estimates. We’ll also discuss the recent dividend increase and the outlook for fiscal 2017. Finally, we’ll look at the company’s expected stock price over the next 12 months.

Let’s start with a quick recap of last quarter’s performance.


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