Why Did Susquehanna Upgrade JM Smucker’s Stock?

By Jason Carr

In a report released today, Pablo Zuanic from Susquehanna upgraded JM Smucker (NYSE: SJM) to Buy, with a price target of $127. The company’s shares closed on Friday at $104.12, close to its 52-week low of $99.57.

Zuanic noted:

“We think the rout of food stocks is ebbing and choose to play this trade through SJM, the worst performing stock in our coverage (-20% three-month) ex THS, and the most discounted on tax-adjusted EBITDA (ex THS, ex K). Past the October quarter, we see top- line and bottom-line catalysts, optionality from a likely pet deal, and argue the JAB/DNKN overhang on the stock is not warranted. The peer discount does not reflect 70% of earnings coming from the advantages categories of pet food and coffee.”

According to TipRanks.com, Zuanic is a 3-star analyst with an average return of 2.1% and a 54.5% success rate. Zuanic covers the Consumer Goods sector, focusing on stocks such as Constellation Brands Inc, Anheuser-Busch Inbev Sa, and Craft Brewers Alliance.

Currently, the analyst consensus on JM Smucker is Hold and the average price target is $116.33, representing an 11.7% upside.

In a report issued on October 30, Jefferies also reiterated a Buy rating on the stock with a $130 price target.

JM Smucker’s market cap is currently $11.83B and has a P/E ratio of 21.87. The company has a book value ratio of 1.7063.

Based on the recent corporate insider activity of 24 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of SJM in relation to earlier this year.

TipRanks has tracked 36,000 company insiders and found that a few of them are better than others when it comes to timing their transactions. See which 3 stocks are most likely to make moves following their insider activities.

The J. M. Smucker Co. engages in the production and market of fruit spreads, peanut butter and other food products. The company operates through the following segments: U.S. Retail Coffee; U.S. Retail Consumer Foods; U.S. Retail Pet Foods; International and Foodservice. The U. S. Retail Coffee segment includes the domestic sales of Folgers, Dunkin Donuts, and Café Bustelo branded coffee. The U.S. Retail Consumer Foods segment sells Jif, Smucker’s, Crisco, and Pillsbury branded products. The U.S. Retail Pet Foods comprises of Meow Mix, Milk-Bone, Natural Balance, Kibbles’n Bits, 9Lives, Pup-Peroni, and Nature’s Recipe branded products. The International and Foodservice segment covers the products distributed domestically and in foreign countries. The company was founded by Jerome Monroe Smucker in 1897 and is headquartered in Orrville, OH.