Credit Suisse Downgrades J.M. Smucker (SJM) to Neutral
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Credit Suisse downgraded J.M. Smucker (NYSE: SJM) from Outperform to Neutral with a price target of $145.00 (from $158.00), saying there are no easy answers for stabilizing pet declines.
Analyst Robert Moskow commented, "We are downgrading Smucker to neutral and lowering our target price to $145/share. We are also lowering our FY 17 EPS slightly below consensus, to $7.64. Our thesis that Smucker would raise its cost savings targets to address its unwieldy overhead structure has played out as we expected. However, we underestimated the hit to sales from difficult comparisons to last year's extensive new product launches and we fear that we underestimated the level of reinvestment it will take to revitalize the struggling pet food division. In addition, we feel less comfortable recommending this stock at a time when the company's key commodity inputs have bottomed and no longer provide material opportunities for margin benefit."
Shares of J.M. Smucker closed at $137.72 yesterday.
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