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Factors Setting the Tone for Smucker's (SJM) Q4 Earnings

Zacks Equity Research

The J. M. Smucker Company SJM is slated to release fourth-quarter fiscal 2020 results on Jun 4. The provider of pet foods as well as consumer foods and beverages has a trailing four-quarter positive earnings surprise of 2%, on average.

The Zacks Consensus Estimate for fiscal fourth-quarter earnings has remained unchanged at $2.27 per share in the past 30 days. The projected figure suggests an increase of 9.1% from the year-ago quarter’s reported number. The consensus mark for revenues is pegged at $2.03 billion, which indicates a growth of 6.6% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for fiscal 2020 earnings is currently pegged at $8.46 per share. The projected figure suggests an increase of 2.1% from the reported figure in fiscal 2019. The consensus mark for revenues is pegged at $7.73 billion.

The J. M. Smucker Company Price and EPS Surprise

 

The J. M. Smucker Company Price and EPS Surprise

The J. M. Smucker Company price-eps-surprise | The J. M. Smucker Company Quote


Factors to Note

In a recent press release, Smucker notified that it has been witnessing higher consumer demand for its products. The upside can be attributed to panic-induced stockpiling amid the coronavirus outbreak. On the back of increased demand from customers in the fiscal fourth quarter, management expects improved results for fiscal 2020 compared with previous guidance. For fiscal 2020, the company envisions net sales to decline 1% compared with the previous guidance of a 3% fall. Further, it anticipates adjusted earnings per share growth at the higher end of its previously-projected band of $8.10-$8.30.

However, escalated costs associated with employee compensation and benefits, freight as well as community support efforts are likely to have put pressure on the company’s performance in fiscal 2020. Apart from these, lower price realization across some segments along with unfavorable foreign currency movementshavebeen headwinds for the company. Also, Smucker has been under pressure, thanks to the divestiture of the U.S. baking business.

Nevertheless, gains from acquisitions and partnerships as well as a strong brand portfolio have been aiding the company. Also, Smucker’s cost-saving initiatives along with efforts to broaden presence in the e-commerce channel bode well.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Smucker this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Smucker carries a Zacks Rank #2 and Earnings ESP of +4.33%.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.

Campbell Soup Company CPB currently has an Earnings ESP of +1.23% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Conagra Brands Inc. CAGcurrently has an Earnings ESP of +5.39% and a Zacks Rank #2.

General Mills, Inc. GIS presently has an Earnings ESP of +0.76% and a Zacks Rank #2.

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Conagra Brands Inc. (CAG) : Free Stock Analysis Report
 
Campbell Soup Company (CPB) : Free Stock Analysis Report
 
The J. M. Smucker Company (SJM) : Free Stock Analysis Report
 
General Mills, Inc. (GIS) : Free Stock Analysis Report
 
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