J. M. Smucker (NYSE:SJM) Shares Gap Up on Strong Earnings

The J. M. Smucker Company (NYSE:SJM)’s stock price gapped up before the market opened on Thursday after the company announced better than expected quarterly earnings. The stock had previously closed at $106.60, but opened at $117.69. J. M. Smucker shares last traded at $113.60, with a volume of 1,324,568 shares traded.

The company reported $2.38 earnings per share for the quarter, topping analysts’ consensus estimates of $2.27 by $0.11. The business had revenue of $2.34 billion for the quarter, compared to analyst estimates of $2.32 billion. J. M. Smucker had a positive return on equity of 15.26% and a negative net margin of 13.61%.The company’s revenue was up 7.0% on a year-over-year basis. During the same quarter in the previous year, the firm earned $2.61 earnings per share.

J. M. Smucker Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Monday, March 2nd. Shareholders of record on Friday, February 13th will be issued a $1.10 dividend. The ex-dividend date of this dividend is Friday, February 13th. This represents a $4.40 dividend on an annualized basis and a dividend yield of 3.8%. J. M. Smucker’s dividend payout ratio (DPR) is currently -39.22%.

Key Headlines Impacting J. M. Smucker

Here are the key news stories impacting J. M. Smucker this week:

• Positive Sentiment: Q3 earnings beat: Smucker reported $2.38 EPS vs. $2.27 expected and revenue of $2.34B (up 7% y/y), which relieved near-term earnings concerns and supported the stock. Listen to Conference Call
• Positive Sentiment: Sales benefited from higher coffee prices — pricing helped top-line growth in the quarter, improving revenue mix despite volume pressure in some categories. Article
• Positive Sentiment: Governance deal with Elliott: Smucker agreed to add two independent directors (Bruce Chung and David Singer), a development investors view as constructive for board oversight and potential shareholder value actions. Press Release
• Positive Sentiment: Street support: Recent analyst moves (Bank of America upgrade; JPMorgan slight price-target lift) add buying interest ahead of/after results. JPMorgan Coverage
• Neutral Sentiment: Company disclosures and materials: Full Q3 press release, slide deck and conference call are available for investors to review details on segment performance and margin drivers. Slide Deck
• Negative Sentiment: Weaker sales guidance tied to factory fire: Management trimmed its sales-growth outlook for the year after a recent manufacturing facility fire, creating a clear near-term operational headwind. WSJ Article
• Negative Sentiment: Margin/efficiency concerns persist: despite the beat, Smucker still reported a negative net margin for the quarter, and the company faces execution risk as it manages recovery from the fire and cost pressures. Investing.com

Wall Street Analysts Forecast Growth

A number of equities analysts recently issued reports on SJM shares. Canaccord Genuity Group upgraded J. M. Smucker to a “buy” rating in a research note on Friday, January 16th. Stifel Nicolaus reduced their price objective on J. M. Smucker from $115.00 to $110.00 and set a “hold” rating for the company in a research note on Wednesday, November 26th. Morgan Stanley reaffirmed an “equal weight” rating and set a $105.00 target price (down from $115.00) on shares of J. M. Smucker in a report on Friday, January 16th. Sanford C. Bernstein increased their price target on shares of J. M. Smucker from $110.00 to $113.00 and gave the stock a “market perform” rating in a report on Wednesday, November 26th. Finally, TD Cowen raised their price target on shares of J. M. Smucker from $105.00 to $112.00 and gave the stock a “hold” rating in a research report on Friday, February 20th. Eight equities research analysts have rated the stock with a Buy rating, nine have given a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat, the company currently has a consensus rating of “Hold” and an average price target of $116.36.

Institutional Inflows and Outflows

Institutional investors have recently bought and sold shares of the stock. UBS Group AG raised its position in shares of J. M. Smucker by 238.7% in the fourth quarter. UBS Group AG now owns 3,924,282 shares of the company’s stock worth $383,834,000 after acquiring an additional 2,765,559 shares during the period. Dimensional Fund Advisors LP grew its position in shares of J. M. Smucker by 33.5% during the 4th quarter. Dimensional Fund Advisors LP now owns 3,392,300 shares of the company’s stock valued at $331,807,000 after acquiring an additional 850,943 shares during the period. Invesco Ltd. increased its stake in shares of J. M. Smucker by 7.5% in the 2nd quarter. Invesco Ltd. now owns 2,819,028 shares of the company’s stock valued at $276,829,000 after purchasing an additional 195,774 shares in the last quarter. Geode Capital Management LLC raised its holdings in J. M. Smucker by 1.8% in the 2nd quarter. Geode Capital Management LLC now owns 2,776,561 shares of the company’s stock worth $271,539,000 after purchasing an additional 49,017 shares during the period. Finally, Morgan Stanley raised its holdings in J. M. Smucker by 16.8% in the 4th quarter. Morgan Stanley now owns 2,486,596 shares of the company’s stock worth $243,214,000 after purchasing an additional 357,253 shares during the period. 81.66% of the stock is currently owned by hedge funds and other institutional investors.

J. M. Smucker Stock Up 8.5%

The company has a quick ratio of 0.37, a current ratio of 0.89 and a debt-to-equity ratio of 1.16. The business has a 50-day simple moving average of $103.44 and a 200-day simple moving average of $105.32. The company has a market cap of $12.34 billion, a PE ratio of -10.30, a P/E/G ratio of 6.68 and a beta of 0.23.

About J. M. Smucker

The J. M. Smucker Company is a diversified food and beverage manufacturer and marketer known for a portfolio of well-established consumer brands. The company’s main business activities include the production and distribution of fruit spreads, peanut butter, coffee and coffee filters, as well as pet food and pet snacks. Smucker’s core product lines serve both retail and foodservice customers through grocery chains, mass merchandisers, club stores, convenience outlets and e-commerce channels.

Among its leading brands are Smucker’s® fruit spreads, Jif® peanut butter, Folgers® and Dunkin’® coffees, and Café Bustelo® coffee.