Tigress Financial Initiates Coverage On The J.M. Smucker Company

Tigress Financial Partners initiated coverage on The J.M. Smucker Company SJM Tuesday with a Buy rating.

Analyst Philip Van Deusen noted that “Having recently come under pressure following the pre-announcement of its 2Q FY15 results on Nov. 12th, J.M. Smucker’s shares are undervalued according to our proprietary valuation metrics.

“Earnings and forward guidance were weaker than anticipated due to a negative consumer response to higher coffee prices, resulting in a decline in volumes, which the company implemented to offset higher commodity costs.”

Van Deusen felt that “SJM will continue to effectively leverage its dominant market share and iconic brands to innovate driving increasing economic profit growth. Furthermore, given the company’s long history of successful and strategic M&A, we believe SJM can add immediate value by leveraging its balance sheet through economic profit accretive acquisitions.”

“SJM looks attractive on key valuation metrics: 1) At 9.96x EV/EBITDAR and 19.5x EV/NOPAT, SJM trades at a discount to its peers like General Mills, Hormel and Mondelez. 2) The market is inaccurately assigning no growth to its current valuation,” according to Van Deusen.

The J.M. Smucker Company recently traded at $101.38, up 0.74 percent.