Catalysts Could Be Coming For 'Fallen Star' JM Smucker

In a report published Wednesday, Credit Suisse analyst Robert Moskow upgraded the rating on

from Neutral to Outperform, while raising the price target from $112 to $125. "After two years of negative retail sales trends and a bumpy start to the Big Heart pet food acquisition, we view Smucker as a "fallen star" that has lost the confidence of the market," analyst Robert Moskow said. He added, however, that the latest Nielsen data indicated that the company's sales trends had "hit a tipping point" in the latest quarter, with "noticeable progress" in both coffee and pet food. The EPS estimates for FY16, FY17 and FY18 have been raised from $5.65 to $5.74, from $6.10 to $6.31 and from $6.61 to $6.91, respectively. Moskow believes Smucker's management was going to introduce a "much more aggressive" cost savings target for the Big Heart integration in the near term, after expanding the project's scope. While expressing concern regarding integration risk associated with the acquired pet food business, the Credit Suisse report stated that Smucker's stock was trading "well below its "normal" valuation discount to its peers" and that the company did not have to generate "heroic" results in the near-term for "the stock to work."