Evercore ISI initiated coverage of The J. M. Smucker Company with an Outperform rating and a $117 price target, implying about 17% upside.
The investment bank cites strong earnings growth potential, improving coffee margins, and significant cost-saving opportunities. Smucker's valuation is attractive relative to center-store peers, with superior balance sheet flexibility.
Evercore projects roughly 9% EPS compound annual growth between fiscal 2026 and 2028. Key drivers include lower green coffee costs, productivity initiatives, reduced interest expenses, and profit recovery in Sweet Baked Snacks.
Folgers and Café Bustelo show strong performance, while Dunkin-branded at-home coffee lags. Uncrustables nears $1 billion in sales. However, Hostess faces operational issues and sales decline since its 2023 acquisition.
Activist investor involvement and board appointments may improve capital allocation. The bull case target is $143, bear case at $80.
