The J. M. Smucker Company (SJM), based in Orrville, Ohio, manufactures and markets branded food and beverage products worldwide. With a market cap of $12.5 billion, J. M. Smucker operates through U.S. Retail Coffee, U.S. Retail Frozen Handheld and Spreads, U.S. Retail Pet Foods, and Sweet Baked Snacks segments.
Companies worth $10 billion or more are generally described as "large-cap stocks," J. M. Smucker fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size and influence in the packaged foods industry. Its portfolio includes famous brands like Smucker's, Jif, Uncrustables, Folgers, Milk-Bone, Meow Mix, and more.
Despite its strengths, J. M. Smucker has slipped 12.2% from its 52-week high of $134.62 achieved on Feb. 2. SJM has surged 9.4% over the past three months, outpacing the Dow Jones Industrials Average’s ($DOWI) 7.2% gains during the same time frame.
However, over the longer term, J. M. Smucker has underperformed DOWI. SJM has dipped 6.5% over the past 52 weeks and 6.4% in 2024, lagging behind DOWI’s 23.3% gains over the past year and 11.2% returns on a YTD basis.
To confirm the bearish trend and recent uptick in prices, SJM has consistently traded below its 200-day moving average over the past year until mid-July and above its 50-day moving average since mid-July with slight fluctuations.
Shares of J. M. Smucker plunged 5% after the release of its Q1 earnings on Aug. 28. Although the company reported a topline growth of 17.7% year-over-year, reaching $2.1 billion, due to rising costs, its profitability margins took a hit. Its selling, distribution, and admin expenses increased by a staggering 24.4% to $390.1 million, while its net interest expense surged by a massive 212.8% to $100.4 million. This resulted in a 1.5% net margin decrease to 8.7% and a marginal dip in net income to $185 million.
Despite a robust revenue increase, J. M. Smucker observed decreased cash from operations and overall cash balance. Its cash and cash equivalent fell to $39.5 million from the year-ago quarter’s cash balance of $241.1 million. This has raised concerns regarding its ability to distribute dividends and invest in future growth opportunities in the coming quarters.
J. M. Smucker’s competitor, Campbell Soup Company (CPB), gained 17.9% over the past year and 14.5% in 2024, outperforming SJM.
Among the 14 analysts covering the SJM stock, the consensus rating is a “Moderate Buy.” The mean price target of $124.61 suggests a potential upside of 5.4% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
