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J.M. Smucker to Top First-Quarter Views Amid Strength in Coffee, Uncrustables, RBC Says

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J.M. Smucker to Top First-Quarter Views Amid Strength in Coffee, Uncrustables, RBC Says

J.M. Smucker's (SJM) is likely to deliver stronger-than-expected fiscal first-quarter results that reflect strength in the coffee segment and its Uncrustables sandwich brand, RBC Capital Markets said in a note sent Tuesday.

The Jif peanut butter maker is scheduled to release quarterly results on Wednesday.

Circana data show J.M. Smucker's organic revenue growth of 4% year over year, compared with the consensus for a 0.6% rise, RBC said.

"Consumption trends look solid (particularly for coffee and Uncrustables) and our channel checks have come back positive throughout the quarter," RBC Co-Head of Global Consumer and Retail Research Nik Modi wrote in the note.

The coffee segment's sales likely grew about 10%, the brokerage said. The frozen handhelds and spreads division's revenue is seen accelerating to 4.8% from 0.8% in the previous quarter, driven by Uncrustables and slight improvement in nut butters.

The owner of coffee brands including Folgers has apparently not reduced prices for coffee, according to RBC.

"Given our understanding that (J.M. Smucker) has reverted its decision to cut list prices on coffee, we believe that this is a tailwind to (full-year) organic growth," Modi said. "On the bottom line, we believe this will have a neutral to slightly positive impact, depending on the level of promotions that the company decides to run (which may change based on competitive dynamics and commodity prices)."

RBC is looking at earnings per share of $2.18 on net sales of $2.12 billion. The brokerage put consensus estimates at $2.21 for EPS and $2.13 billion for revenue.

In June, J.M. Smucker Chief Financial Officer Tucker Marshall said first-quarter adjusted EPS was expected to increase by a mid-teen percentage, driven partly by gross profit gains in US retail coffee. Net sales were projected to be flat, with higher prices offsetting unfavorable volume and mix, he said.

General Mills (GIS) and Kraft Heinz (KHC) have reported higher-than-expected results for their most recent quarter.

J.M. Smucker's guidance issued in June includes adjusted EPS between $9.75 and $10.25 for fiscal 2027. The midpoint of the range is below the current FactSet-polled consensus of $10.07. The company reported adjusted EPS of $9.15 for fiscal 2026.

The company has guided for full-year sales to drop by 3% to 4% from the previous fiscal year's $9.05 billion print. Analysts are looking for sales of $8.78 billion.

RBC has an outperform rating on the stock, with a $135 price target. J.M. Smucker's shares were down 0.7% intraday Tuesday, but have risen 28% so far this year.

"We believe (J.M. Smucker's) current valuation does not give enough credit to the company's brands and the categories it plays in, resulting in a risk-to-reward that skews positive," Modi said.

Price: $125.10, Change: $-0.78, Percent Change: -0.62%

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