SJM - Embedded Expectations Analysis - 2020 08 18
The J.M. Smucker Company (SJM:USA) currently trades below recent averages relative to UAFRS-based (Uniform) earnings, with a 16.4x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and management may have concerns about sales growth, Pet food business projections, and their business focusSpecifically, management may lack confidence in their ability to grow overall net sales and sustain coffee sales and Consumer Foods segment profit growth. In addition, they may have concerns about continued sales declines in their Natural Balance and Rachael Ray Nutrish dog food brands, pet food customers needing to destock their pantries over the next quarter, and disruptions in their pet business projections. Moreover, they may be concerned about the coronavirus impact on their guidance, headwinds in their away-from-home business, and the sustainability of rising consumer takeaway. Finally, they may lack confidence in their ability to sustain their underlying business momentum, make their Jif products available to all of their customers, and the effectiveness of their marketing spend
Smucker (J.M.) manufactures and markets food and beverage products. The company's principal products are coffee, dog food, pet snacks, cat food, peanut butter, fruit spreads, frozen handheld products, shortening and oils, portion control products, juices and beverages, and flour and baking ingredients. The company has four reportable segments: U.S. Retail Coffee, U.S. Retail Consumer Foods, and U.S. Retail Pet Foods, and International and Away From Home. The U.S. retail market segments represent the sales of food and beverage products to consumers through retail outlets in North America. The International and Away From Home segment represents sales outside of the U.S. retail market segments.
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