Benchmark cuts J&J Snack Foods price target to $165, maintains Buy

Published 24/04/2025, 16:36
Benchmark cuts J&J Snack Foods price target to $165, maintains Buy

On Thursday, Benchmark analyst Todd Brooks revised the price target for J&J (NYSE:JNJ) Snack Foods (NASDAQ:JJSF) to $165 from the previous $175. Despite the adjustment, the firm maintains a Buy rating on the company’s stock. Brooks attributed the change to a more cautious outlook on revenue and margins for the remaining three quarters of fiscal year 2025, ending in September.

The revision comes amid declining consumer confidence, which has reached near record lows, primarily influenced by forward-looking expectations. This sentiment, coupled with weaker-than-anticipated first-quarter box office results, prompted Benchmark to reduce its revenue forecast for J&J Snack Foods to $1.621 billion from the prior estimate of $1.633 billion.

Furthermore, Brooks pointed out that the reduced revenue expectations have led to a lower operating margin assumption for fiscal year 2027. The new forecast is 6.7%, down from the previous 7.4%. This adjustment reflects the impact of potential commodity and tariff pressures on the company’s expenses.

As a result of these factors, the estimated adjusted EBITDA (AEBITDA) for fiscal year 2026 has been lowered to $221 million from the earlier projection of $225 million. The adjustments reflect a more conservative stance by Benchmark in light of the current economic headwinds facing J&J Snack Foods.

Despite the lowered financial expectations, the analyst’s continued endorsement with a Buy rating indicates a belief in the company’s long-term potential. The new price target of $165 suggests that Benchmark still sees value in J&J Snack Foods’ stock, even as it navigates through a challenging economic landscape.

In other recent news, J&J Snack Foods reported its first-quarter fiscal year 2025 results, revealing revenue of $363 million, which exceeded the consensus estimate of $361 million and marked a 4% increase year-over-year. However, the company’s adjusted earnings per share (EPS) fell short of expectations, coming in at $0.33, significantly missing the forecasted $0.73. The shortfall was largely attributed to a decline in gross margins, which dropped to 25.9%, falling 150 basis points below consensus estimates. Additionally, adjusted EBITDA was reported at $25.3 million, a 16% decrease from the previous year and $6 million below consensus expectations. Despite these challenges, Benchmark analyst Todd Brooks maintained a Buy rating and a $200 price target for the company. In governance news, J&J Snack Foods confirmed the election of Kathleen E. Ciaramello to its board and ratified Grant Thornton LLP as its independent auditor for the fiscal year ending September 27, 2025. The company also announced a new $50 million stock repurchase authorization, reflecting confidence in its long-term value and financial flexibility.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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