Twinkie maker J.M. Smucker (SJM) is closely monitoring potential shifts in food and nutrition regulations under Robert F. Kennedy Jr. (RFK Jr.), who could become the head of the Department of Health and Human Services if appointed by President-elect Donald Trump. Kennedy, known for his “Make America Healthy Again” campaign during his run for U.S. president as an independent, has strongly criticized additives, chemicals, and sugars in packaged foods for contributing to chronic illness in the U.S.
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RFK Jr.’s Views May Spell Trouble for SJM
If Robert F. Kennedy Jr. does go on to lead the Department of Health and Human Services, his views may spell trouble for companies like Smucker. The manufacturer of food and beverage products owns the Uncrustables brand and recently acquired Hostess, the maker of Twinkies, Ho Hos, and Donettes. These are all packaged food brands, and the company could find itself under scrutiny if Kennedy’s policies target products like these.
However, Smucker’s CFO, Tucker Marshall, commented, “As it relates to the incoming administration under RFK’s leadership, we need to assess any policy decisions.”
Furthermore, Kennedy is expected to push for limits on food dyes, which could further impact Smucker. This is because the company’s sugar-free jams, jellies, and preserves currently include food dyes. As a result, Smucker commented that it will “continue to review ingredients to ensure alignment with the expectations of consumers, and all of its products will continue to meet all regulatory requirements.”
SJM Announces Q2 Results
Meanwhile, the company announced its Fiscal Q2 results on Tuesday, reporting net sales of $2.3 billion, a 17% increase year-over-year. This was above the consensus expectation of $2.27 billion. Additionally, SJM’s adjusted earnings rose by 7% year-over-year to $2.76 per share, exceeding Street estimates of $2.51 per share.
Is SJM Stock a Good Buy?
Analysts remain cautiously optimistic about SJM stock, with a Moderate Buy consensus rating based on three Buys and seven Holds. Over the past year, SJM has increased by more than 10%, and the average SJM price target of $126.22 implies an upside potential of 5.1% from current levels.
