China smartphone shipments slumped in June on inventory overhang: Jefferies
On Thursday, Jefferies analyst Rob Dickerson adjusted the price target for J.M. Smucker (NYSE: SJM) shares, reducing it to $111 from the previous $114, while maintaining a Hold rating on the stock. The revision follows the company’s third-quarter earnings, which fell short of revenue expectations. Despite underperformance in all segments except Coffee, J.M. Smucker saw stronger margins in its Pet and Coffee divisions, leading to a profit that exceeded forecasts. According to InvestingPro data, the company maintains a healthy gross profit margin of 38.9% and has demonstrated consistent profitability over the last twelve months.
J.M. Smucker’s management has revised its fiscal year 2025 sales guidance downward, citing supply disruptions in the Pet segment and a reduction in orders from Hostess totaling approximately $20 million in the fourth quarter. However, the company remains committed to its long-term strategy of achieving at least 4% growth in its strategic brand sales (SBS), despite the challenges presented by a recent $1 billion write-down on an acquisition and a leadership change announced within its SBS division. InvestingPro analysis reveals the company has maintained dividend payments for 55 consecutive years, showcasing long-term financial stability. Get access to additional exclusive ProTips and comprehensive analysis through InvestingPro’s detailed Research Report.
The company’s commitment to its growth algorithm comes at a time when increased investments are deemed necessary to support certain brands within its portfolio. The analyst’s commentary suggests that while J.M. Smucker faces headwinds, the company’s profit performance and strategic initiatives are factors in maintaining the Hold rating.
Investors and market watchers will be keeping a close eye on how J.M. Smucker navigates these challenges and whether the company’s efforts to bolster its brands will translate into improved financial performance in the long run. The price target adjustment by Jefferies reflects a cautious but watchful stance on the stock’s potential.
In other recent news, J.M. Smucker reported mixed results for its third fiscal quarter. The company exceeded earnings per share (EPS) expectations, reporting $2.61 against a forecast of $2.36. However, revenue fell short, coming in at $2.19 billion compared to the anticipated $2.23 billion. This revenue shortfall was primarily due to challenges in the Sweet Baked Snacks segment and a decrease in Hostess net sales by 8% year-over-year. Additionally, the company recorded an $800 million goodwill write-down and a $200 million impairment charge related to the Hostess acquisition, reflecting ongoing challenges.
CFRA analyst Arun Sundaram has adjusted the price target for J.M. Smucker shares, reducing it to $126 from $131 while maintaining a Hold rating. The adjustment reflects a revised earnings forecast, with the fiscal year 2026 EPS estimate lowered to $10.47. Despite these setbacks, some of J.M. Smucker’s brands, like Uncrustables and Cafe Bustelo, continue to show strong growth. The company has also revised its full-year sales guidance downward, citing the $20 million revenue miss and reduced expectations for the Hostess portfolio.
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