- SJM recently reported Q2 results reflecting a marginal deterioration in adjusted gross profit margin and adjusted operating income margin relative to Q2 2017.
- Adjusted EPS revised downward for the second time subsequent to the release of FY adjusted EPS in June 2017 but FCF forecast remains consistent at $0.775B.
- SJM has a 4 pronged strategy in which it intends to generate sustainable, long-term sales and earnings growth.
- Competitive pressures persist but SJM has strong brand recognition. Underperformance is largely due to temporary factors.
- SJM will likely trade in a tight range over the next several months thus providing an opportunity to skim some profit through the use of covered calls.
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