Shares of JM Smucker Co SJM have lagged the packaged food peers year-to-date, and this gap is likely to close as the company executes on its fiscal 2023 outlook, according to BofA Securities.
The JM Smucker Analyst: Peter Galbo upgraded the rating for JM Smucker from Neutral to Buy, while raising the price target from $145 to $155.
The JM Smucker Thesis: The company is scheduled to report its fiscal first-quarter earnings on August 23, and could beat expectations, Galbo said in the upgrade note.
JM Smucker could report quarterly growth in net sales of 1.3% year-on-year “on higher pricing in coffee and higher volume/mix in pet food,” the analyst mentioned. “This results in a revised 1Q23 EPS estimate of $1.26 (prior $1.23),” he added.
The upside to quarterly sales, earnings and outlook for fiscal 2023 stems from JM Smucker moving past the Jif peanut butter recall, Galbo further stated.
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“Long term, we believe SJM’s more focused portfolio after several years of divestitures positions the company well as consumer wallets tighten, given lower price elasticities in the remain-co portfolio relative to both historical SJM and to center-store packaged food peers,” he added
SJM Price Action: Shares of JM Smucker were up by 1.35% to $139.38 at the close on Wednesday.
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