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On Friday, DA Davidson reaffirmed their Neutral stance on J.M. Smucker (NYSE: SJM) shares, maintaining a price target of $122.00. The research firm’s analyst, Brian Holland, provided insights into the company’s third-quarter fiscal year 2025 performance, which revealed a headline top-line miss and a lower implied fourth-quarter bottom-line guidance. Holland noted that these results were impacted by supply chain issues, which affected net sales. Despite these challenges, the company maintained 7.07% revenue growth over the last twelve months, with demand remaining relatively stable throughout the quarter. According to InvestingPro data, analyst price targets currently range from $104 to $135, with three analysts recently revising their earnings expectations downward.
Holland acknowledged the company’s history of earnings per share (EPS) outperformance, which he believes should not be overlooked. Despite the less-than-ideal quality of the third-quarter print, he suggested that the consensus and valuation had already accounted for the potential of J.M. Smucker to exceed financial projections for the fiscal year 2026. InvestingPro analysis shows the company has maintained dividend payments for 55 consecutive years, demonstrating remarkable financial stability despite current challenges. While not profitable in the last twelve months, analysts expect the company to return to profitability this fiscal year.
The analyst expressed a constructive view prior to the earnings release, anticipating that the company’s performance could surpass expectations. Although the third-quarter results did not fully meet this anticipation, Holland’s analysis suggests that there is no reason to alter his perspective on the stock’s prospects.
He concluded that the third-quarter outcomes, despite the challenges, should provide sufficient support for J.M. Smucker’s stock at its current levels. Holland’s commentary reflects a cautious but not pessimistic outlook for the food manufacturer, as it navigates through the recent supply chain difficulties.
J.M. Smucker’s stock performance will continue to be observed by investors as the company approaches its fourth-quarter earnings, with DA Davidson’s maintained price target and rating serving as a reference point for market expectations.
In other recent news, J.M. Smucker reported its third-quarter fiscal year 2025 earnings, revealing earnings per share (EPS) of $2.61, surpassing expectations and marking a 5% increase year-over-year. Despite this, the company faced revenue challenges, reporting $2.186 billion, which fell short of consensus estimates by 1.8%. The revenue shortfall was attributed to supply issues in the Pet Food segment and a decrease in Hostess brand sales. Consequently, J.M. Smucker revised its fiscal year 2025 revenue guidance downward while increasing its EPS forecast by $0.10, reflecting improved gross margins and anticipated Hostess synergies.
Analysts have responded to these developments with mixed assessments. Stifel maintained a Hold rating with a $120 price target, citing better-than-expected earnings but ongoing challenges in the Hostess segment. Bernstein also held its Market Perform rating with a $104 target, noting mixed results and ongoing uncertainties in the coffee market. Jefferies reduced its price target to $111, maintaining a Hold rating, while CFRA adjusted its target to $126, also maintaining a Hold rating, citing concerns over high leverage and Hostess brand performance.
Despite these challenges, J.M. Smucker’s coffee segment remains strong, with expectations of earnings growth in fiscal year 2026, although analysts remain cautious due to coffee inflation. The company has also faced an $800 million goodwill write-down and a $200 million impairment charge related to the Hostess acquisition, reflecting ongoing integration challenges. Investors will be watching closely as the company navigates these issues and seeks to stabilize its various brand segments.
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