Amazon, Smucker Are S&P Decliners

NEW YORK ( TheStreet) -- Amazon ( AMZN) and J.M. Smucker ( SJM) were among the worst performers on the S&P 500 midday Thursday.

The S&P 500 rose 3.76 points Thursday to 1,346.99.

Shares of Amazon dropped 4.68% to $175.83. The company was downgraded Thursday by Morgan Stanley ( MS) analysts to equal-weight from overweight.

"We expect Amazon.com's share price to experience downward pressure as the market digests mixed data points," Morgan Stanley analysts wrote in a report Thursday. "Apple's strength in iPhone and iPad sales are negatively affecting Amazon.com by accelerating the company's transition from physical to digital media sales (which has effects on sales, margins and ROIC) as well as impacting Electronics & General Merchandise ("EGM") growth. Additionally, the ongoing share shift from Amazon.com owned-inventory to Third Party ("3P") / Fulfillment by Amazon ("FBA") units may challenge ROIC through decelerating asset turnover and decreased cash flow from negative working capital."

Amazon has an estimated price-to-earnings ratio for next year of 44.44; the average for broad-line retailers is 27.43. For comparison, Wal-Mart ( WMT) and Costco ( COST) both have lower forward P/Es of 12.69 and 19.21, respectively.

Twenty-three of the 40 analysts who cover Amazon rated it a buy. Sixteen gave it a hold rating and one rated it a sell.

TheStreet Ratings gives Amazon a C+ grade with a hold rating. The stock has risen 1.74% year to date.

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Shares of J.M. Smucker fell 7.82% to $72.04 on about three times its average daily trading volume. The company reported Thursday third-quarter earnings of $116.8 million, or $1.03 a share, which fell from year-ago earnings of $132 million, or $1.11 a share.

Adjusted earnings in the quarter were $1.22 a share. Analysts were anticipating $1.41 a share in earnings.

"SJM is yet another company to point out lower consumer demand across the food industry. This is a potentially negative read-through for traditional grocers and other food manufacturers, which may be dealing with more elasticity than anticipated as consumers are no longer accepting higher retail prices," JPMorgan analysts wrote in a report Thursday.

J.M. Smucker has an estimated price-to-earnings ratio for next year of 12.93; the average for food products companies is 13.76. For comparison, Campbell Soup ( CPB) and Tyson Foods ( TSN) both have lower forward P/Es of 12.78 and 8.11, respectively.

Of the 17 analysts who cover J.M. Smucker, 10 gave it a hold rating, six rated it a buy and one called it a sell.

TheStreet Ratings gives J.M. Smucker an A+ grade with a $102.01 price target. The stock has fallen 7.53% year to date.

-- Written by Alexandra Zendrian

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