SJM - J. M. Smucker: Snack On This High Yield And Low P/E Staples Stock

2024-06-13 01:03:13 ET

Summary

• Food inflation has moderated, helping packaged food companies, though a more price-conscious consumer poses a risk to the industry.
• I have a buy rating on J.M. Smucker due to its compelling valuation metrics and expected EPS growth in the years ahead.
• But the firm faces challenges from high labor costs and integrating Hostess Brands effectively while the stock's technical situation is weak.
• I highlight key price levels to monitor as shares test key support.

Food inflation continues to trend in the right direction. While this morning’s May CPI report revealed a 0.14% increase in the food component, up from just +0.02% in April, the last four inflation reports suggest food at home costs are less intimidating for families across the country considering the solid rise in wages so far this year. Still, there are challenges facing food companies that face high labor costs and a more price-conscious consumer. ...

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