HomePet Industry NewsPet Financial NewsCan The Earnings Streak Continue?

Can The Earnings Streak Continue?

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The Zacks Consumer Staples sector has been stronger than most in 2022, down 5% and outperforming the S&P 500 by a notable margin.

Companies in the sector have the advantageous ability to generate revenue in the face of many economic situations, helping explain why it’s been a brighter spot in a dim market.

A widely-recognized company in the realm, The J.M. Smucker Co. SJM, is slated to unveil Q2 earnings on November 21st, before market open.

The J.M. Smucker Company is a leading marketer and manufacturer of consumer food and beverage products and pet food and pet snacks in North America.

Currently, the company carries a favorable Zacks Rank #2 (Buy) paired with an overall VGM Score of a B.

How does everything else stack up heading into the report? Let’s take a closer look.

Share Performance & Valuation

SJM shares have been notably strong in 2022, up more than 10% and crushing the general market’s performance.

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Zacks Investment Research

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Over the last month, however, SJM shares have tacked on 2.3% in value, underperforming the S&P 500 by a fair margin.

Zacks Investment Research

Zacks Investment Research

Image Source: Zacks Investment Research

The company’s shares currently trade at a 16.9X forward earnings multiple, above the 13.9X five-year median by a fair margin but representing a 15% discount relative to the Zacks Consumer Staples sector.

SJM carries a Value Style Score of an A.

Zacks Investment Research

Zacks Investment Research

Image Source: Zacks Investment Research

Quarterly Estimates

The company has seen two positive earnings estimate revisions hit the tape over the last several months for the quarter to be reported, with the Zacks Consensus EPS Estimate of $2.19 indicating a 9.8% Y/Y decrease in quarterly earnings.

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Zacks Investment Research

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SJM’s top-line is in better health; the Zacks Consensus Sales Estimate of $2.2 billion suggests an improvement of more than 5% from year-ago quarterly sales of $2.1 billion.

Quarterly Performance

The J.M. Smucker Company has been on a strong earnings streak, exceeding both revenue and earnings estimates in ten consecutive quarters.

Just in its latest release, the company penciled in a 33.6% bottom-line beat paired with a 1.3% sales surprise. Below is a chart illustrating the company’s revenue on a quarterly basis.

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Zacks Investment Research

Image Source: Zacks Investment Research

Putting Everything Together

SJM shares are well in the green year-to-date but have slightly underperformed relative to the S&P 500 over the last month.

The company’s forward earnings multiple is above its five-year median and below its Zacks sector average.

Analysts have been bullish in their earnings outlook over the last several months, with estimates indicating a Y/Y decline in earnings but an uptick in revenue – likely a reflection of margin compression.

The company has repeatedly exceeded quarterly estimates, chaining together a long streak of positive earnings and revenue surprises.

Heading into the release, The J.M. Smucker Company SJM carries a Zacks Rank #2 (Hold) paired with an Earnings ESP Score of -0.5%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
The J. M. Smucker Company (SJM) : Free Stock Analysis Report
 
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