Morgan Stanley Cuts Smucker (SJM) Target After Strong Run, Flags Margin Recovery Risk

The J. M. Smucker Company (NYSE:SJM) is included among the 15 Best High Yield Stocks to Buy.

On January 16, Morgan Stanley downgraded The J. M. Smucker Company (NYSE:SJM) to Equal Weight from Overweight, and also cut its price target to $105 from $115. The firm said the broader US food space is heading into 2026 with increasing competitive pressure, as value-driven pricing, heavier promotions, and renewed private label momentum start picking up again. Those trends, Morgan Stanley noted, add to “already present” sales headwinds and leave less room for the kind of margin recovery investors may be hoping for. The downgrade also follows a stretch where Smucker had delivered relatively strong share performance compared to peers.

Smucker has already been dealing with a tougher cost backdrop. In November, the company guided for full-year profit that came in below what analysts were expecting, mainly because a sharp rise in coffee costs is poised to weigh on margins. Smucker, which owns Folgers and sources green coffee largely from Brazil and Vietnam, has also been pressured by steep US duties on Brazilian imports introduced last year under US President Donald Trump.

In its latest quarter (ended October 31), the company’s overall pricing was up sharply, with prices rising by 11 percentage points, but volumes fell by 6 percentage points. The weakness was particularly noticeable in key categories. In its US coffee segment, which is one of Smucker’s biggest revenue drivers, lower volumes reduced net sales by 6 percentage points. In pet food, volumes dropped even more, down 8 percentage points.

Management also signaled that additional cost pressure is still building. On the post-earnings call, executives said the company plans to absorb coffee tariffs and inflation this winter without raising prices across its US retail coffee portfolio. That decision, however, is expected to create roughly $75 million in extra costs.

The J. M. Smucker Company (NYSE:SJM) is a global packaged food company that manufactures and markets a range of well-known branded food and beverage products worldwide.

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