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On Monday, Morgan Stanley (NYSE:MS) analysts began covering J.M. Smucker stock (NYSE:SJM), assigning an Overweight rating and setting a price target of $123.00. The research firm’s position reflects confidence in the company’s growth prospects compared to its industry peers. The company, currently trading at $109.70, has maintained dividend payments for 55 consecutive years, with a current yield of 3.94%.InvestingPro analysis reveals additional insights about SJM’s market position, with multiple key metrics and ProTips available for subscribers.
The analysts at Morgan Stanley highlighted that J.M. Smucker’s focused portfolio of leading brands is poised to outperform competitors in the center of the store categories. The firm’s evaluation suggests that the stock’s current valuation does not fully account for the potential sustained momentum of the Uncrustables product line, the expected resilience of the company’s coffee segment to inflationary pressures, and the initial signs of stabilization in the Hostess brand. With revenue growth of 7.07% in the last twelve months and analysts forecasting continued profitability this year, the company shows promising fundamentals despite recent challenges.
Morgan Stanley’s analysis indicates a favorable risk-reward scenario for J.M. Smucker, with a bullish outlook that is three times more likely than a bearish one. The $123 price target represents Morgan Stanley’s expectation for the stock’s potential performance. According to InvestingPro’s Fair Value analysis, the stock currently appears slightly undervalued, with analyst targets ranging from $104 to $135.
J.M. Smucker’s strategic positioning in the market, with a focus on strong and competitive categories, has been recognized by the analysts as a key driver for growth. The company’s ability to navigate inflation, particularly in the coffee segment, alongside the positive developments with Hostess, contributes to the optimistic assessment from Morgan Stanley.
The Overweight rating suggests that Morgan Stanley expects J.M. Smucker stock to outperform the average total return of the stocks the firm covers over the next 12 to 18 months. Investors and market watchers will be monitoring the company’s performance to see if it aligns with Morgan Stanley’s projections.
In other recent news, J.M. Smucker’s third-quarter fiscal year 2025 earnings report showed an earnings per share (EPS) of $2.61, surpassing expectations with a 5% increase. This exceeded the company’s own projections and Stifel’s estimates, attributed to stronger gross margins and reduced selling, distribution, and administrative expenses. However, the company revised its fiscal year 2025 revenue guidance downward due to ongoing challenges with Hostess brand sales. Despite these challenges, J.M. Smucker increased its EPS forecast for the year by $0.10, reflecting a 1% rise. DA Davidson maintained a Neutral rating on J.M. Smucker, with a price target of $120, noting the company’s efforts to address underperformance in Hostess Brands (NASDAQ:TWNK) and challenges in the coffee segment. The firm also maintained a Neutral stance with a $122 price target, acknowledging supply chain issues impacting net sales but recognizing stable demand. Additionally, major US food corporations, including J.M. Smucker, have been advocating for tariff exemptions on certain imports to protect manufacturers and reduce consumer inflation. These developments highlight the company’s current landscape as it navigates industry challenges and strategic adjustments.
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