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The J. M. Smucker Company (SJM) Hit a 52 Week High, Can the Run Continue?
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Shares of Smucker (SJM - Free Report) have been strong performers lately, with the stock up 6% over the past month. The stock hit a new 52-week high of $148.39 in the previous session. Smucker has gained 8.6% since the start of the year compared to the -8.8% move for the Zacks Consumer Staples sector and the -0.8% return for the Zacks Food - Miscellaneous industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 23, 2022, Smucker reported EPS of $1.67 versus consensus estimate of $1.25 while it beat the consensus revenue estimate by 1.34%.
For the current fiscal year, Smucker is expected to post earnings of $8.46 per share on $8.36 billion in revenues. This represents a -4.73% change in EPS on a 4.55% change in revenues. For the next fiscal year, the company is expected to earn $9.57 per share on $8.59 billion in revenues. This represents a year-over-year change of 13.14% and 2.72%, respectively.
Valuation Metrics
Smucker may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Smucker has a Value Score of B. The stock's Growth and Momentum Scores are C and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 17.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 18.7X. On a trailing cash flow basis, the stock currently trades at 11.3X versus its peer group's average of 11.9X. Additionally, the stock has a PEG ratio of 6.3. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Smucker currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Smucker meets the list of requirements. Thus, it seems as though Smucker shares could still be poised for more gains ahead.
How Does SJM Stack Up to the Competition?
Shares of SJM have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Conagra Brands (CAG - Free Report) . CAG has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. Conagra Brands beat our consensus estimate by 9.62%, and for the current fiscal year, CAG is expected to post earnings of $2.43 per share on revenue of $12.14 billion.
Shares of Conagra Brands have gained 5.3% over the past month, and currently trade at a forward P/E of 14.48X and a P/CF of 11.16X.
The Food - Miscellaneous industry may rank in the bottom 57% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for SJM and CAG, even beyond their own solid fundamental situation.
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The J. M. Smucker Company (SJM) Hit a 52 Week High, Can the Run Continue?
Shares of Smucker (SJM - Free Report) have been strong performers lately, with the stock up 6% over the past month. The stock hit a new 52-week high of $148.39 in the previous session. Smucker has gained 8.6% since the start of the year compared to the -8.8% move for the Zacks Consumer Staples sector and the -0.8% return for the Zacks Food - Miscellaneous industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 23, 2022, Smucker reported EPS of $1.67 versus consensus estimate of $1.25 while it beat the consensus revenue estimate by 1.34%.
For the current fiscal year, Smucker is expected to post earnings of $8.46 per share on $8.36 billion in revenues. This represents a -4.73% change in EPS on a 4.55% change in revenues. For the next fiscal year, the company is expected to earn $9.57 per share on $8.59 billion in revenues. This represents a year-over-year change of 13.14% and 2.72%, respectively.
Valuation Metrics
Smucker may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Smucker has a Value Score of B. The stock's Growth and Momentum Scores are C and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 17.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 18.7X. On a trailing cash flow basis, the stock currently trades at 11.3X versus its peer group's average of 11.9X. Additionally, the stock has a PEG ratio of 6.3. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Smucker currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Smucker meets the list of requirements. Thus, it seems as though Smucker shares could still be poised for more gains ahead.
How Does SJM Stack Up to the Competition?
Shares of SJM have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Conagra Brands (CAG - Free Report) . CAG has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. Conagra Brands beat our consensus estimate by 9.62%, and for the current fiscal year, CAG is expected to post earnings of $2.43 per share on revenue of $12.14 billion.
Shares of Conagra Brands have gained 5.3% over the past month, and currently trade at a forward P/E of 14.48X and a P/CF of 11.16X.
The Food - Miscellaneous industry may rank in the bottom 57% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for SJM and CAG, even beyond their own solid fundamental situation.