Analysts Conflicted on These Consumer Goods Names: JM Smucker (COMM) and CommScope Holding (COMM)


Analysts have been eager to weigh in on the Consumer Goods sector with new ratings on JM Smucker (NYSE: SJM) and CommScope Holding (NASDAQ: COMM).

JM Smucker (NYSE: SJM)

Susquehanna analyst Pablo Zuanic maintained a Buy rating on JM Smucker (NYSE: SJM) today and set a price target of $123. The company’s shares closed yesterday at $106.36.

Zuanic wrote:

“SJM coffee EBIT margins in 4Q18, though up 110bp, came in below SFG/ consensus as well as the company’s own expectations (as discussed at CAGNY in Feb). Could we have better anticipated this? The short answer is more yes than no. The green coffee cost picture (down yoy) expected for the qtr was in line with expectations (on hedging, management had good visibility into the quarter). The main variance in the quarter (vs. expectations) was the level of price cuts in R&G coffee (triggered by private label players cutting earlier than in other cycles vis-à-vis cost trends) and the higher promotional spend by SJM. The reality is that both of these variables (Folgers R&G pricing, and % under promotion), are captured by the scanner data, so to some extent a detailed bridge could have helped to better anticipate the lower margin expansion vs. expectations.”

According to TipRanks.com, Zuanic is a 4-star analyst with an average return of 4.7% and a 55.3% success rate. Zuanic covers the Consumer Goods sector, focusing on stocks such as Coca-Cola European Partners, Constellation Brands Inc, and Anheuser-Busch Inbev Sa.

Currently, the analyst consensus on JM Smucker is Moderate Buy and the average price target is $112.63, representing a 5.9% upside.

In a report issued on June 7, Jefferies also maintained a Buy rating on the stock with a $135 price target.

See today’s analyst top recommended stocks >>

CommScope Holding (NASDAQ: COMM)

In a report released yesterday, Marshall Senk from Rosenblatt Securities initiated coverage with a Hold rating on CommScope Holding (NASDAQ: COMM) and a price target of $32. The company’s shares closed yesterday at $29.69.

Senk observed:

“We initiate coverage of Neutral rating and a 12-month price target of $32. For FY 2018 we estimate revenues of $4.75 billion and earnings of $2.40, in-line with consensus and company guidance. In spite of a rising tide in U.S. and Asia service provider capital spending, COMM’s revenue outlook indicates modest share loss amidst declining gross margins. We suspect the company has struggled with mediocre product innovation amongst more nimble and focused competitors.”

According to TipRanks.com, Senk is a 5-star analyst with an average return of 26.8% and a 82.5% success rate. Senk covers the Technology sector, focusing on stocks such as Proofpoint Inc, Salesforce.com, and Carbonite Inc.

Currently, the analyst consensus on CommScope Holding is Moderate Buy and the average price target is $36, representing a 21.3% upside.

In a report issued on June 19, Credit Suisse also reiterated a Hold rating on the stock with a $31 price target.

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