Bank of America sees upside ahead for shares of J.M. Smucker after the Consumer Analyst Group of New York’s annual conference last week. The bank upgraded the stock to buy from neutral and hiked its price target to $130 from $120. That indicates a 17.7% gain from Friday’s close. Bank of America believes the risk from J.M. Smucker’s 2023 acquisition of Hostess Brands — which previously led it to downgrade the stock to neutral — has subsided. “While SJM acknowledged potential near‑term ‘volatility’ at CAGNY,” the analyst conference, “we think recent actions—ending certain promotions and optimizing the manufacturing footprint—should help stabilize profitability, while core segments (Coffee, Pet, PB & J) continue to show strong fundamentals,” wrote analyst Peter Galbo in a Monday note. SJM YTD mountain SJM year-to-date chart. Galbo said comments at the conference by J.M. Smucker that indicated the company is not looking for any further acquisitions and hints at potential future stock buybacks are bullish for the food and beverage manufacturer. Bank of America also views J.M. Smucker as uniquely positioned to manage the fallout from GLP-1 usage, which investors worry may disrupt companies with foods deemed less “healthy” in their portfolios. “~70-75% of the combined revenue comes from Coffee, Pet, Peanut Butter, and Intl which has little/no exposure, while Frozen handheld/spreads are largely sold to younger consumers (Uncrustables) or even have some nutritional offsets like protein (Peanut butter, new Uncrustables offerings),” he wrote. Most analysts covering Smucker are on the sidelines despite Galbo’s upgrade. LSEG data shows that 12 of 19 analysts rate the stock as a hold. The average price target also implies upside of just 4.6%.
