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The J. M. Smucker Company (NYSE:SJM): What Does The Future Look Like?

Simply Wall St

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As The J. M. Smucker Company (NYSE:SJM) announced its earnings release on 30 April 2019, analysts seem extremely confident, with earnings expected to grow by a high double-digit of 52% in the upcoming year, relative to the past 5-year average growth rate of 17%. Presently, with latest-twelve-month earnings at US$514m, we should see this growing to US$780m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for J. M. Smucker in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

View our latest analysis for J. M. Smucker

How will J. M. Smucker perform in the near future?

The longer term expectations from the 14 analysts of SJM is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of SJM's earnings growth over these next few years.

NYSE:SJM Past and Future Earnings, June 30th 2019

This results in an annual growth rate of 21% based on the most recent earnings level of US$514m to the final forecast of US$1.1b by 2022. EPS reaches $9.54 in the final year of forecast compared to the current $4.52 EPS today. With a current profit margin of 6.6%, this movement will result in a margin of 13% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For J. M. Smucker, I've put together three key aspects you should look at:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is J. M. Smucker worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether J. M. Smucker is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of J. M. Smucker? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.