Jefferies Cautious on the J.M. Smucker Co.

Jefferies has published its SJM 2Q11 preview on the J.M. Smucker Co. SJM Jefferies writes, "Our PT of $64 is ~13x our FY11 cash EPS estimate of $4.98. The multiple, while below the historical average, reflects the near-term challenges. Nevertheless, with a still favorable view of SJM's strategy and with a DCF indicating an intrinsic value of about $80, we will be paying close attention for signs of an improving economic and competitive climate." Risks include concentration with key retailers, accelerating private label penetration/increased competitive/macro pressure, and more volatility in commodity prices to the downside.