Market Overview

Coffee Profits Continue To Give A Jolt To Deutsche's View On Smucker

Share:
Coffee Profits Continue To Give A Jolt To Deutsche's View On Smucker

Mario Contreras of Deutsche Bank previewed in a research note on Thursday J M Smucker Co (NYSE: SJM)'s upcoming first-quarter results, scheduled for release on August 23.

Contreras is expecting the company to earn $1.82 per share, which is ahead of the consensus estimate of $1.74 and marks an increase from the $1.60 the company earned a year ago. The analyst stated that he views Smucker "favorably" ahead of the print given its "solid" profitability in its coffee segment and cost savings progress.

On the other hand, Smucker's pet segment remains "challenged" but the broader pet category is "attractive" on a long-term basis.

Related Link: Starbucks Investors Rejoice: Global Demand For Coffee At Historical High Levels

Contreras added that investors should focus on Smucker's coffee fundamentals, especially Dunkin Donuts' K-cup outlook (Smucker holds the distribution rights in the retail space), pet food trends and competition in heritage products. The analyst also suggested investors be on the lookout for any new updates on the company's $100 million incremental fiscal 2017 savings target and total savings target of $250 million by fiscal 2018.

Shares remain Buy rated with a price target raised to $165 from a previous $162, which is based on a discounted cash flow analysis which assumes 2–3 percent sales growth, 4–5 percent EBIT growth, 5–6 percent EPS growth and a 7 percent WACC (weighted average cost of capital).

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for SJM

DateFirmActionFromTo
Jan 2020JefferiesInitiates Coverage OnHold
Dec 2019Deutsche BankReinstatesHold
Nov 2019Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for SJM
View the Latest Analyst Ratings

Posted-In: Analyst Color Earnings Long Ideas Commodities Previews Reiteration Markets Analyst Ratings Best of Benzinga

 

Related Articles (SJM)

View Comments and Join the Discussion!
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com