Barclays Maintains an 'Equalweight' on J.M. Smucker (SJM); Still Just 'Passing' Through?
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Price: $124.32 +1.03%
Rating Summary:
15 Buy, 14 Hold, 2 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
15 Buy, 14 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barclays maintains an 'Equalweight' on J.M. Smucker (NYSE: SJM) price target of $80.00.
Barclays analyst says, "Though F2Q marked the peak in green coffee inflation for SJM, we still anticipate this mismatch persisting in F3Q, albeit to a lesser degree. To the extent that the segment's gross profit dollars again decline in F3Q, it could very well call into the question the efficacy of the pass-through pricing model in coffee and potentially lead investors to reassess whether SJM's recent -6% coffee price decrease was implemented to reflect declining green coffee costs or instead as a response to concerns about volume."
"The good news for SJM is that volume growth across its business did improve sequentially in 4Q. Even so, given the high magnitude of pricing currently in place for the company, management now expects volume declines in the -2% to -3% range during F2H. As such, in this note we update our FY12 EPS bridge to assess the magnitude of elasticity that SJM could withstand, and our math suggests that the top-end of guidance could be reached even if volumes decline by almost -3% YOY in F2H."
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 $71.85 yesterday.
Barclays analyst says, "Though F2Q marked the peak in green coffee inflation for SJM, we still anticipate this mismatch persisting in F3Q, albeit to a lesser degree. To the extent that the segment's gross profit dollars again decline in F3Q, it could very well call into the question the efficacy of the pass-through pricing model in coffee and potentially lead investors to reassess whether SJM's recent -6% coffee price decrease was implemented to reflect declining green coffee costs or instead as a response to concerns about volume."
"The good news for SJM is that volume growth across its business did improve sequentially in 4Q. Even so, given the high magnitude of pricing currently in place for the company, management now expects volume declines in the -2% to -3% range during F2H. As such, in this note we update our FY12 EPS bridge to assess the magnitude of elasticity that SJM could withstand, and our math suggests that the top-end of guidance could be reached even if volumes decline by almost -3% YOY in F2H."
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 $71.85 yesterday.
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