J.M. Smucker Stock Price Near Support Leading into Earnings – What To Expect

J.M. Smucker's stock (NYSE: SJM) has traded through 2025 barely unchanged, and currently sits at the mid-point of the range with a 0.43% gain YTD leading into earnings before this morning's opening bell.

Smucker has cultivated a reputation for exceeding earnings expectations in recent quarters, a streak that has undoubtedly bolstered confidence leading into the print. This positive track record sets a high bar for the upcoming report.

The company's fiscal year 2025 guidance projects earnings per share (EPS) between $9.70 and $10.10, with net sales growth anticipated between 8.5% and 9.5%, translating to approximately $8.87 to $8.96 billion.

Analysts are forecasting a $2.24 EPS for the quarter, a decrease from the $2.66 reported in the same quarter last year, alongside revenue of $2.19 billion.

Several recent events have significantly influenced Smucker's stock performance and investor sentiment. One key factor is the planned closure of the Hostess Brands manufacturing facility in Indianapolis, expected to be completed by early 2026. This decision, impacting approximately 371 employees, is part of a broader effort to consolidate production and improve operational efficiency.

While such strategic moves are often viewed favorably in the long term, the immediate impact of restructuring costs and potential disruptions to supply chains could weigh on near-term results. The company has indicated that further details will be provided in the fiscal year 2025 results, making the earnings call particularly crucial for understanding the financial implications of this closure.

The acquisition of Hostess Brands in November 2023 for $5.6 billion remains a pivotal event. This acquisition brought iconic snack brands like Twinkies and CupCakes into Smucker's portfolio, expanding its presence in the snack food market.

However, Smucker's third-quarter fiscal 2025 results, released in February, revealed a nuanced picture. While adjusted EPS exceeded expectations at $2.61, net sales declined by 2% year-over-year to $2.2 billion, partially attributed to supply chain disruptions. CEO Mark Smucker emphasized the company's strategic focus on key growth platforms and its commitment to delivering both top- and bottom-line growth, but the sales decline raises questions about the company's ability to sustain growth momentum in a challenging macroeconomic environment.

The stock price finds itself just above a support level of ~ $110, below both its 50-day ($116.42) and 200-day ($115.55) simple moving averages (SMA). This technical setup, coupled with recent company developments and analyst expectations, paints somewhat of a complex picture for investors.

Adding to the complexity, analyst opinions on Smucker have been mixed. While some maintain a positive outlook, others have lowered their price targets, reflecting concerns about the company's near-term prospects. The average price target currently stands at $121.36, with a range from $104 to $135, indicating a degree of uncertainty among analysts. That being said, a potential upside of close to 10% according to latest targets indicates a broadly bullish tone.

A sceptic may question whether the closure of the Indianapolis plant, while strategically sound, could signal underlying challenges in the acquired Hostess business. Perhaps the synergies are not materializing as quickly as hoped, or the acquired brands are facing unforeseen headwinds. Furthermore, the projected decline in EPS, coupled with the third-quarter sales decline, warrants a closer examination in upcoming results to ensure this is not an ongoing trend.

It remains possible that Smucker is facing broader macroeconomic pressures that are not fully reflected in the current stock price. Is the market underestimating the impact of rising input costs, changing consumer preferences, and increased competition, or is the stock priced for a bounce? We can expect to find out more soon enough.