The J. M. Smucker Company (SJM), headquartered in Orrville, Ohio, is a leading manufacturer and marketer of branded food and beverage products. With a market cap of $11.8 billion, the company operates through a portfolio of iconic and trusted brands such as Folgers, Jif, Smucker's, Dunkin' Donuts, Crisco, Pillsbury, and more.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and SJM definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the packaged foods industry. SJM's ability to innovate in product and packaging, adapt to emerging consumer preferences, and leverage its integrated distribution network enhances its market position. Additionally, its strong brand and category management, combined with effective customer service, have strengthened its competitive edge in the industry.
Despite its notable strength, SJM slipped 17.4% from its 52-week high of $134.62, achieved on Feb. 2. Over the past three months, SJM stock fell 6.5% underperforming the Consumer Staples Select Sector SPDR Fund’s (XLP) 5% decline during the same time frame.
In the longer term, shares of SJM rose 2.3% over the past six months but dipped 10.9% over the past 52 weeks, underperforming XLP’s six-month gains of 1.6% and 10.8% returns over the last year.
To confirm the bearish trend, SJM is trading below its 50-day and 200-day moving averages since early October, experiencing some fluctuations.
SJM’s underperformance can be attributed to its declining coffee segment, struggling due to increased competition, supply chain disruptions, and growing input costs.
On Nov. 26, SJM shares closed up more than 5% after reporting its Q2 results. Its adjusted EPS of $2.76, surpassed Wall Street expectations of $2.51. The company’s revenue was $2.3 billion, matching Wall Street forecasts. SJM expects full-year adjusted EPS to be between $9.70 and $10.10.
SJM’s rival, The Campbell's Company (CPB) shares lagged behind the stock, declining 6.9% over the past six months. However, CPB has taken the lead over the stock, declining 3.7% over the past 52 weeks.
Wall Street analysts are moderately bullish on SJM’s prospects. The stock has a consensus “Moderate Buy” rating from the 14 analysts covering it, and the mean price target of $128 suggests a potential upside of 15.1% from current price levels.
