SJM - J.M. Smucker looks attractive to BofA with value offerings standing out

Bank of America turned more constructive on J.M. Smucker ( NYSE: SJM ) after taking in the food company's earnings report ( details , transcript ).

Analyst Peter Galbo and team said SJM's more streamlined portfolio with less elastic category exposure in comparison to center store peers is benefitting the packaged foods company as the consumer continues to economize spending. That trend was particularly notable in the pets categories, where SJM's value offerings in cat food and pet treats drove meaningful share gains in the quarter, while dog food stabilized on better in-stock levels in comparison to peers.

BofA reiterated a Buy rating on SJM and raised the firm's price objective to $160 from $155, which works out to ~17.5X the 2023 EPS estimates. The valuation multiple is noted to be at a discount to the overall peer group average of 19X, but more in line with centers store packaged food peers which is seen as warranted as SJM executes against its FY23 plan.  The 52-week high for SJM is $152.74.

J.M Smucker ( SJM ) fell back 0.27% in premarket trading on Wednesday to $141.96 after a 3.34% post-earnings jump on Tuesday.

See all the valuation metrics on J.M. Smucker.

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