Argus Downgrades J.M. Smucker To Hold, Cites Margin Pressures And Coffee Costs

Argus downgraded J.M. Smucker (NYSE:SJM) from Buy to Hold, sending shares down more than 1% in intraday trading Friday.

The analysts noted that Smucker continued to struggle with volume growth amid economic uncertainty, with price increases aimed at offsetting commodity inflation weighing further on sales. Rising green coffee prices and tariffs were also pressuring margins.

On the positive side, Argus highlighted the divestiture of slower-growth pet food brands and the acquisition of Hostess Brands, which could support cross-promotional efforts with Smucker’s legacy portfolio. The company was also expanding its Uncrustables brand into convenience stores as part of a revenue synergy strategy.

Smucker shares traded at 12 times projected FY27 EPS, compared with a peer average of 17, which Argus said reflected reasonable valuation given inflationary conditions and weak coffee margins. The firm said it would consider an upgrade if signs of sustainable margin and volume growth emerged.