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Factors Setting the Tone for Smucker's (SJM) Q2 Earnings

Zacks Equity Research

The J. M. Smucker Company SJM is slated to release second-quarter fiscal 2020 results on Nov 22. The provider of pet foods as well as consumer foods and beverages delivered a positive earnings surprise of 0.8% in the last reported quarter.

The Zacks Consensus Estimate for fiscal second-quarter earnings declined by a penny in the past 30 days and is currently pegged at $2.15 per share. The projected figure suggests a decline of 0.9% from the year-ago quarter’s reported figure. The consensus mark for revenues is pegged at $1,998 million, which indicates a decline of 1.2% from the figure reported in prior-year quarter.

Factors to Note

Smucker is under pressure, thanks to the divestiture of the U.S. baking business. This has been weighing upon the International, Away from Home and U.S. Retail Consumer Foods segments. Adverse impacts from baking-business divestiture along with declines in private label pet food products are likely to have affected the top line in the second quarter.

Also, lower net price realization across some segments, unfavorable shipment timings and intense competition in the premium dog food business are headwinds for the company.

Nonetheless, gains from acquisitions and partnerships as well as a strong brand portfolio are upsides. Markedly, the buyout of Ainsworth has been yielding positively. Further, the company’s cost-saving initiatives and efforts to broaden presence in the e-commerce channel bode well.

The J. M. Smucker Company Price, Consensus and EPS Surprise

 

The J. M. Smucker Company Price, Consensus and EPS Surprise

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

 

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Smucker this season. 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.   

Smucker carries a Zacks Rank #4 (Sell) and Earnings ESP of +0.84%.

Stocks Poised to Beat Earnings Estimates

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

Ross Stores ROST has an Earnings ESP of +4.03% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar General DG has an Earnings ESP of +2.34% and a Zacks Rank #2.

Foot Locker FL has an Earnings ESP of +0.64% and a Zacks Rank #3.

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The J. M. Smucker Company (SJM) : Free Stock Analysis Report
 
Foot Locker, Inc. (FL) : Free Stock Analysis Report
 
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