On Thursday, Stifel, a financial services firm, reiterated its Buy rating on J.M. Smucker (NYSE:SJM) stock with a maintained price target of $135.00.
The company reported a fourth-quarter earnings per share (EPS) of $2.66, showcasing a 1% year-over-year growth and surpassing both Stifel's estimate by $0.33 and the consensus estimate by $0.31.
J.M. Smucker's organic sales increased by 3% in the quarter, which was slightly below Stifel's expectations. However, the company's stronger than anticipated EPS was supported by an expansion in gross margin and reduced impact from below-the-line items.
Gross margin saw a significant increase of 570 basis points compared to the previous year and improved sequentially by 310 basis points, reaching 40.3%.
The company has introduced its initial fiscal year 2025 guidance, which includes a forecast for comparable sales growth ranging from 1.5% to 2.5%, and an EPS projection between $9.80 and $10.20. This guidance indicates a potential decrease of up to 1.5% or an increase of up to 2.5% compared to the previous year.
Stifel's continued endorsement of a Buy rating and a target price of $135 comes in the wake of these financial results. Investors and analysts can access the pre-recorded call for more detailed information, and a question-and-answer session is scheduled for 9 a.m. Eastern Time. Interested parties can join the call by dialing 877-407-2991 within the United States or 201-389-0925 for international callers.
In other recent news, J.M. Smucker Co. reported a solid profit in the fourth quarter, with adjusted earnings per share (EPS) of $2.66, surpassing the consensus estimate.
Despite this, the company's revenue fell short at $2.21 billion, missing analysts' estimate of $2.24 billion. Notably, J.M. Smucker anticipates an increase in net sales of 9.5 to 10.5 percent for the fiscal year 2025.
On the analyst front, Citi revised its price target for J.M. Smucker while maintaining a Buy rating, and Jefferies also adjusted its price target for the company, maintaining a Hold rating. Deutsche Bank continued to hold its position with a steady price target. These revisions reflect recent developments and sales trends within the company.
In addition, J.M. Smucker declared a dividend of $1.06 per share, payable to shareholders on record as of May 17, 2024. The company has also scheduled its Annual Meeting of Shareholders to be conducted virtually on August 14, 2024, providing an opportunity for shareholders to participate in company governance. These are the latest updates from the company, reflecting its ongoing financial activities and shareholder engagement.
InvestingPro Insights
J.M. Smucker's (NYSE:SJM) recent financial performance, highlighted by Stifel, is further illuminated by real-time data from InvestingPro. The company's market capitalization stands at a robust $11.71 billion, indicating a significant presence in the market. Despite a challenging period reflected by a negative P/E ratio of -113.18, analysts are optimistic about the future, as evidenced by an adjusted P/E ratio for the last twelve months as of Q3 2024 at a more favorable 14.95. This shift suggests expectations of a return to profitability, which aligns with the InvestingPro Tips indicating that net income is expected to grow this year.
Additionally, J.M. Smucker's commitment to shareholder returns is demonstrated by its impressive track record of raising its dividend for 14 consecutive years and maintaining dividend payments for 54 consecutive years. The current dividend yield stands at a healthy 3.84%, which is particularly attractive to income-focused investors. Furthermore, the company's gross profit margin for the last twelve months as of Q3 2024 remains strong at 36.5%, underscoring operational efficiency.
InvestingPro Tips also highlight that management has been aggressively buying back shares, a move that can signal confidence in the company's future prospects and often leads to an increase in earnings per share. However, investors should be aware of the short-term challenges, such as the fact that short-term obligations exceed liquid assets, which could impact financial flexibility.
For those considering an investment in J.M. Smucker, additional insights are available on InvestingPro, including a total of 9 tips that could guide investment decisions. To explore these insights further, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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