J.M. Smucker (SJM) reported better-than-expected fiscal Q4 earnings, but investor sentiment turned negative due to weaker organic sales and underwhelming fiscal 2026 guidance, UBS Securities said in a note emailed Wednesday.
The projected earnings per share range of $8.50 to $9.50 falls nearly 12% below consensus estimates, while sales growth outlook was broadly in line, margin pressures, rising costs and weak volumes weighed on the earnings guidance, according to the note.
The firm said that J.M. Smucker expects fiscal 2026 gross margin to range between 35.5% to 36% and the margin pressure is due to higher green coffee prices and tariffs.
UBS said that fiscal Q4 outperformance was driven by surprisingly better gross margin and lower selling, general and administrative expenses. Both gross margin and operating profit margin exceeded forecasts.
The firm has a buy rating on J.M. Smucker's stock with a $129 price target.
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