Goldman Sachs Downgrades J.M. Smucker (SJM) to Sell

March 18, 2013 7:23 AM EDT
Get Alerts SJM Hot Sheet
Price: $132.86 -0.11%

Rating Summary:
    7 Buy, 11 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 23 | Down: 34 | New: 34
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Goldman Sachs downgraded J.M. Smucker (NYSE: SJM) from Neutral to Sell with a price target of $93.00 (from $95.00) citing competitive risk, sales inflection and peak valuation.

The downgrade of J.M. Smucker comes ahead of what the firm believes is a negative organic sales growth inflection and risk that cost favorability will have to be reinvested to fend off new competitive threats. One threat is Kraft (NASDAQ: KRFT) in coffee and the high growth K-cup category.

"We believe the Street's top-line expectations are too high which has fueled excessive exuberance on EPS," the analyst said.

In addition to the downgrade, Goldman cut FY14/FY15 EPS estimates by 1%/2% in consideration of these factors. FY14 EPS goes from $5.69 to $5.63 and FY15 goes from $6.25 to $6.12.

For an analyst ratings summary and ratings history on J.M. Smucker click here. For more ratings news on J.M. Smucker click here.

Shares of J.M. Smucker closed at $97.40 yesterday.

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