Benzinga - by Nabaparna Bhattacharya, Benzinga Editor.
Goldman Sachs analyst Jason English reiterated a Sell rating on J.M. Smucker Company (NYSE: SJM) with a price target of $131.
The company reported a second-quarter FY24 sales decline of 12% year-on-year to $1.94 billion, missing the analyst consensus of $1.95 billion. Adjusted EPS of $2.59 beat the consensus estimate of $2.47.
Better-than-expected price realization drove superior gross margins, which, along with lower distribution costs, drove higher operating margins.
The company reported an EPS beat in the quarter despite the absorption of a $0.29 supplier agreement termination in its coffee segment, according to the analyst.
Management provided an update to its full-year outlook to account for its recently closed Hostess acquisition.
While it trimmed its organic growth outlook on lower co-man revenue, it raised its full-year underlying EPS outlook.
Coffee profits were weighed down by a $39 million supplier agreement termination charge.
Moving down the P&L, a gross margin of 38.7% (vs. GS/consensus 37.6%/37.2%) came ahead of expectations on higher price realization and lower green coffee costs, the analyst notes.
As such, the company now expects FY24 EPS in the range of $9.25-$9.65 (vs. $9.45 to $9.85 prior and consensus $9.62), with 2H24 implied EPS of $4.45-$4.85 below incoming expectations (consensus $4.94).
According to the analyst, lower-than-expected input cost inflation, more benign competition, and greater-than-expected innovation or cost-cutting success may pose risks to the price target.
Price Action: SJM shares are trading higher by 3.27% to $116.11 on the last checked Tuesday.
Photo Via Company
Latest Ratings for SJM
| Mar 2022 | JP Morgan | Maintains | Neutral | |
| Mar 2022 | Morgan Stanley | Maintains | Underweight | |
| Mar 2022 | Citigroup | Maintains | Neutral |
View the Latest Analyst Ratings
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.