J.M. Smucker (SJM) is one of the few packaged food companies with a path to continued top-line momentum and margin growth, as well as solid potential for outsized earnings recovery in fiscal 2027 if current trends persist, UBS Securities said Friday in a note.

While there are concerns about the Hostess brand and how it could impact top-line and segment profit, UBS said Hostess trends have stabilized in recent weeks, coffee elasticities are exceeding expectations, and most of the remaining portfolio is also showing sequential improvement.

The firm expects earnings per share of $8.98 for fiscal 2026, versus Street estimate of $9.02 and the company's guidance of $8.75 to $9.25. UBS forecasts net sales growth of 4.3%, compared with consensus of 4.0% and guidance of 3.5% to 4.5%. Comparable sales growth is estimated to be 5.7%, relatively in-line with Street at 5.6% and closer to the top end of company guidance at 5% to 6%.

While management reiterated its view that tariff relief would be a $75 million tailwind or add roughly $0.50 to the bottom line in fiscal 2027, UBS said it does not expect the company to provide an official outlook for FY2027.

The company is scheduled to report fiscal Q3 results on Thursday.

UBS maintained a buy rating on J.M. Smucker with a price target of $117.

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