J.M. Smucker (SJM) Stock Climbs Ahead of Earnings Release

J.M. Smucker (SJM) shares rose today ahead of the release of the company's second quarter earnings results due out before the open tomorrow.
By Tony Owusu ,

NEW YORK (TheStreet) -- Shares of J.M. Smucker (SJM) - Get Report closed trading up by 1.1% to $113.34 on Wednesday afternoon, ahead of the release of the company's fiscal 2016 second quarter earnings results, due out before the open tomorrow morning.

The Orrville, OH-based food manufacturer is expected to report second quarter earnings of $1.51 per share on revenue of $2.1 billion.

Those totals are are above the $1.32 per share and $1.95 billion in revenue the company reported for the same quarter in the previous year.

Additionally, last month, the company's price target was raised to $127 from $125 by analysts' at Credit Suisse.

TheStreet has further coverage of Smucker here

Separately, TheStreet Ratings team rates SMUCKER (JM) CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

We rate SMUCKER (JM) CO (SJM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, increase in net income and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 5.2%. Since the same quarter one year prior, revenues rose by 47.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Net operating cash flow has significantly increased by 3866.66% to $305.10 million when compared to the same quarter last year. In addition, SMUCKER (JM) CO has also vastly surpassed the industry average cash flow growth rate of -23.54%.
  • 40.34% is the gross profit margin for SMUCKER (JM) CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.98% trails the industry average.
  • SMUCKER (JM) CO reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SMUCKER (JM) CO reported lower earnings of $3.45 versus $5.40 in the prior year. This year, the market expects an improvement in earnings ($5.75 versus $3.45).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Food Products industry average, but is greater than that of the S&P 500. The net income increased by 17.6% when compared to the same quarter one year prior, going from $116.00 million to $136.40 million.
  • You can view the full analysis from the report here: SJM

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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