J.M. Smucker (SJM) is poised for significant growth over the next 12 months, BofA Securities said in a note Monday.
The analysts said that previous downside concerns about integrating the Hostess acquisition have been absorbed, and the company is expected to see upside from coffee-driven margin expansion, as prices deflate, which could lift earnings per share to $10.
J.M. Smucker is expected to maintain guidance and management emphasized that mergers and acquisitions are not a priority, which could lead to share buybacks once leverage targets are met, BofA said, citing the company at the Consumer Analyst Group of New York conference.
BofA raised its estimated calendar-year 2027 earnings per share to 12.5x from 11x.
The company is expected to stabilize profitability despite near-term volatility as it ends certain promotions and optimizes manufacturing, BofA analysts noted.
J.M. Smucker said it will report fiscal Q3 results Thursday.
BofA Securities upgraded J.M. Smucker to buy from neutral and raised the price target to $130 from $120.
Price: 110.06, Change: -0.32, Percent Change: -0.29