Value
7.7/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 9.4 |
| EV/EBITDA | 5.8 |
| Fwd P/E | 9.2 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 10.9x
- ▸PEG: 0.01
- ▸Attractively valued
SJM · Why this verdict
Why The J.M. Smucker (SJM) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.0/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Smucker trades at a forward price-to-earnings ratio of 10.8x with a PEG of 0.06, scoring 7.7 out of 10 on value, yet simultaneously carries a quality score of 3.4 below the minimum acceptable floor of 4.0 due to absent competitive moat and a Piotroski F-Score of 6.7. Valuation breakdown | Overall quality score rises above 4.0 within 12 months through improvements in net margin and return metrics as operational efficiency initiatives take effect. | →Stable |
| CounterThe low forward multiple may not be a bargain but rather a fair price for a business with no competitive moat, moderate margins, and heavy customer concentration — the quality concerns may justify a discount. | ||
The top 10 customers represent 60% of revenue and the company has concentrated supplier reliance on Keurig for K-Cup pod sales, creating significant business vulnerability if any major customer relationship changes or if the Keurig distribution arrangement is modified. Bear case | The company publicly discloses progress in reducing its top-10 customer concentration to below 55% of revenue within 24 months. | →Stable |
| CounterDeep relationships with major retailers like Walmart provide stable, predictable revenue streams and negotiating leverage on shelf placement that smaller food companies cannot achieve. | ||
The stock is in a death-cross recovery pattern — the 50-day moving average crossed below the 200-day moving average but improving MACD suggests momentum is gradually recovering, while RSI at 75 signals the stock may be technically overbought in the near term. Momentum breakdown | RSI normalizes to below 65 within 30 days as the overbought condition resolves without triggering a sharp selloff, and price holds above the 200-day moving average. | →Stable |
| CounterOverbought RSI at 75 in a recovery pattern can sometimes indicate breakout conditions with further upside before normalization rather than an imminent reversal. | ||
A put-to-call ratio of 2.14 combined with implied volatility of 65% and the stock trading above the analyst price target indicates that options market participants are actively hedging against downside at current elevated price levels. Key risks | Put-to-call ratio falls below 1.2 within 3 months as the stock price consolidates and downside hedging activity normalizes. | →Stable |
| CounterElevated put-to-call ratios in consumer staples stocks are often institutional hedges covering broad equity portfolios rather than directional bets on this specific company. | ||
Smucker trades at a forward price-to-earnings ratio of 10.8x with a PEG of 0.06, scoring 7.7 out of 10 on value, yet simultaneously carries a quality score of 3.4 below the minimum acceptable floor of 4.0 due to absent competitive moat and a Piotroski F-Score of 6.7.
→StableValuation breakdown
- Expectation
- Overall quality score rises above 4.0 within 12 months through improvements in net margin and return metrics as operational efficiency initiatives take effect.
CounterThe low forward multiple may not be a bargain but rather a fair price for a business with no competitive moat, moderate margins, and heavy customer concentration — the quality concerns may justify a discount.
The top 10 customers represent 60% of revenue and the company has concentrated supplier reliance on Keurig for K-Cup pod sales, creating significant business vulnerability if any major customer relationship changes or if the Keurig distribution arrangement is modified.
→StableBear case
- Expectation
- The company publicly discloses progress in reducing its top-10 customer concentration to below 55% of revenue within 24 months.
CounterDeep relationships with major retailers like Walmart provide stable, predictable revenue streams and negotiating leverage on shelf placement that smaller food companies cannot achieve.
The stock is in a death-cross recovery pattern — the 50-day moving average crossed below the 200-day moving average but improving MACD suggests momentum is gradually recovering, while RSI at 75 signals the stock may be technically overbought in the near term.
→StableMomentum breakdown
- Expectation
- RSI normalizes to below 65 within 30 days as the overbought condition resolves without triggering a sharp selloff, and price holds above the 200-day moving average.
CounterOverbought RSI at 75 in a recovery pattern can sometimes indicate breakout conditions with further upside before normalization rather than an imminent reversal.
A put-to-call ratio of 2.14 combined with implied volatility of 65% and the stock trading above the analyst price target indicates that options market participants are actively hedging against downside at current elevated price levels.
→StableKey risks
- Expectation
- Put-to-call ratio falls below 1.2 within 3 months as the stock price consolidates and downside hedging activity normalizes.
CounterElevated put-to-call ratios in consumer staples stocks are often institutional hedges covering broad equity portfolios rather than directional bets on this specific company.
TrendMatrix Research · core thesis
Engine thesis — one sentence
J.M. Smucker Company trades at an attractive forward price-to-earnings ratio of 10.8x with a PEG of 0.06, but a quality score below the minimum threshold, heavy customer and supplier concentration, a confirmed death cross, and the stock already trading above its price target leave the current setup unattractive for new entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 3.4 |
| Gross margin | 2.9 |
| Op margin | 7.4 |
| Net margin | 0.0 |
| Current ratio | 3.1 |
| Moat | 3.6 |
| Piotroski F | 6.7 |
- ▸No competitive moat
Growth
3.9/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 3.9 |
Momentum
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 2.3 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.8 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 7.3 |
| Price target | 5.8 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $1,048,521 (0.008% of mkt cap)
Peer rank
2.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.8 |
| quality rank | 1.3 |
| growth rank | 5.0 |
Technical
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.9 |
| support resistance | 0.8 |
| 52w position | 9.7 |
Risk (lower is worse)
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.1 |
| days to cover | 8.0 |
| volatility | 6.3 |
| put call | 8.0 |
| implied vol | 5.3 |
| beta | 10.0 |
| debt equity | 4.4 |
| news risk | 5.0 |
- ▸Concentration risks: 5 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 3.6 |
| dividend safety | 5.2 |
| news activity | 8.0 |
- ▸Dividend: 378.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:5.9>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:55d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.4=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.39
Upside
-5.3%
Downside
13.8%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 7.7 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-0.4=NEGATIVE.
The strongest dimensions are Value at 7.7, Risk (lower is worse) at 6.8, and Sentiment at 6.1; the weakest are Peer rank at 2.3, Quality at 3.4, and Growth at 3.9. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.39 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Value Multiple Below Threshold Quality
Trip ifQuality score falls below 2.5, more than 26% below the already-below-floor level of 3.4, indicating business fundamentals are deteriorating further.
- P2Heavy Customer And Supplier Concentration
Trip ifTop-10 customer concentration rises above 65% of revenue, indicating the company is becoming more dependent on fewer customers rather than diversifying.
- P3Death Cross Recovery Pattern
Trip ifRSI drops below 45 within 60 days, indicating the death cross recovery has failed and price is resuming the prior downtrend.
- P4Elevated Put Call Ratio Downside Hedge
Trip ifPut-to-call ratio rises above 3.0, more than 40% above the current elevated level of 2.14, indicating hedging activity is intensifying ahead of an expected negative catalyst.