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JM Smucker: An Investment Analysis and Growth Forecast

Founded in 1897, JM Smucker has established itself as a leader in the processed and packaged goods sector. With nearly 5,000 employees and revenues of $5.72 billion in 2013, the company exhibits strong market presence. This report provides a comprehensive analysis of JM Smucker's financials, including trend analysis, ROE breakdown, updated sales forecasts, and valuation metrics. Given the analysis, JM Smucker is slightly undervalued and poised for future growth, making it a compelling investment opportunity.

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JM Smucker: An Investment Analysis and Growth Forecast

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  1. JM SmuckerProcessed & Packaged Goods Connor Myers

  2. “With a name like Smucker’s, it has to be good”

  3. Background • Founded in 1897 in Orville, Ohio. • Full-Time Employees: 4,875 • Revenues of 5.72 Billion Dollars in 2013

  4. Comparable Companies (Processed & Packaged Goods) • Starbucks (SBUX) • Green Mountain Coffee (GMCR) • Mondelez (MDLZ)

  5. Module 12 & 13: Full Information Forecasting and Valuation • Trend Analysis of NEA and EPAT • Breakdown of ROE • New Sales, EPAT, and NEA forecasts • Updated Valuations using FCF, REI, Abnormal Growth • Buy/Sell Recommendation

  6. NEA Trend Analysis

  7. EPAT Trend Analysis

  8. First Level Breakdown $603.04 - $56.84 _______________________________________________ [($7,028.2 + $7,114.7) – ($1,879.4 + $1,951.4)] / 2 10.6%

  9. ROE Drivers

  10. 2nd & 3rd Level Breakdown

  11. Updated Sales Forecast

  12. Updated Sales Forecast • There is not much information in the 10K breaking down sales • After some analysis determined the 6.5% was still a good estimate • Only change is I faded the 6.5% down to 2.5% in 1% increments

  13. Updated EPM • Cost of Goods Sold remained relatively constant as a % of sales over the past 3 years so I kept it constant • All the expenses have increased over the years, plans to increase advertising and marketing and cut distribution costs • Most other accounts I just kept constant due to the lack of detail in the notes

  14. Updated EPM

  15. Updated EPAT

  16. Updated EATO Assets

  17. Updated EATO Liabilities

  18. Updated NEA

  19. Discounted Cash Flow

  20. REI

  21. Abnormal Growth

  22. Estimated Value per Share

  23. Conclusion • Pretty Close! • I would recommend buying shares of JM Smucker because it is slightly undervalued • Also their future plans to keep expanding should increase their value

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