J&J Snack Meals manufactures, markets, and distributes snack meals and drinks to the meals service and retail grocery store industries in the US, Canada, and Mexico. Identified for its SuperPretzel mushy pretzels and ICEE frozen drinks, the corporate provides quite a lot of bakery merchandise resembling fig and fruit bars, cookies, donuts, churros, and muffins.
Included in 1971 and headquartered in Mount Laurel, New Jersey, J&J Snack Meals additionally sells machines and machine components to different meals and beverage corporations. It markets its merchandise by way of department shops, quick meals and informal eating eating places, theme parks, comfort shops, film theaters, and unbiased retailers.
The corporate faces a number of headwinds amid a difficult working setting. A modest income base gives the corporate much less mounted value leverage and fewer distribution channels relative to bigger rivals. Estimated gross sales development of lower than 2% for the present fiscal 12 months implies a slowdown from latest tendencies.
The Zacks Rundown
A Zacks Rank #5 (Sturdy Promote) inventory, J&J Snack Meals JJSF is a part of the Zacks Meals – Miscellaneous trade group, which at the moment ranks within the backside 43% out of roughly 250 Zacks Ranked Industries. As such, we count on this trade group as an entire to underperform the market over the following 3 to six months, simply because it has over the previous 12 months:
Picture Supply: Zacks Funding Analysis
Shares within the backside tiers of industries can typically be intriguing quick candidates. Whereas particular person shares have the flexibility to outperform even after they’re a part of a lagging trade, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey ahead is that rather more tough.
JJSF shares have been underperforming over the previous 12 months. The inventory is hitting a collection of decrease lows and represents a compelling quick alternative as we head additional into 2025.
Latest Earnings Misses & Deteriorating Outlook
J&J Snack Meals has fallen wanting earnings estimates in every of the final 4 quarters. Simply final week, the corporate reported fiscal second-quarter earnings of $0.35 per share, lacking the Zacks Consensus Estimate by a whopping -49.3%. J&J Snack Meals has posted a trailing four-quarter common earnings miss of -28.1%.
A drop in quantity throughout bigger segments like churros and pretzels dented first-quarter gross sales, inflicting a pointy drop in gross revenue. Falling wanting earnings estimates is a recipe for underperformance, and JJSF isn’t any exception.
The corporate has been on the receiving finish of unfavorable earnings estimate revisions as of late. Trying on the present quarter, analysts have slashed estimates by -12.06% prior to now 60 days. The fiscal Q3 Zacks Consensus EPS Estimate is now $1.75 per share, reflecting unfavorable development of -11.6% relative to the year-ago interval.
Picture Supply: Zacks Funding Analysis
Falling earnings estimates are an enormous pink flag and have to be revered. Unfavourable development year-over-year is the kind of development that bears wish to see.
Technical Outlook
As illustrated beneath, JJSF inventory is in a sustained downtrend. Discover how the inventory has made a collection of decrease lows, extensively underperforming the main indices. Additionally be aware that shares are buying and selling beneath downward-sloping 50-day (blue line) and 200-day (pink line) shifting averages – one other good signal for the bears.
Picture Supply: StockCharts
JJSF inventory has skilled what is called a “loss of life cross,” whereby the inventory’s 50-day shifting common crosses beneath its 200-day shifting common. Shares must make an outsized transfer to the upside and present growing earnings estimate revisions to warrant taking any lengthy positions. The inventory has fallen greater than 20% this 12 months alone.
Remaining Ideas
A deteriorating basic and technical backdrop present that this inventory just isn’t set to make its technique to new highs anytime quickly. The truth that JJSF is included in one of many worst-performing trade teams gives yet one more headwind to a protracted record of considerations.
A historical past of earnings misses and falling future earnings estimates will doubtless function a ceiling to any potential rallies, nurturing the inventory’s downtrend.
Potential buyers might need to give this inventory the chilly shoulder, or maybe embody it as a part of a brief or hedge technique. Bulls will need to keep away from JJSF till the state of affairs reveals main indicators of enchancment.
Zacks’ Analysis Chief Names “Inventory Most More likely to Double”
Our workforce of consultants has simply launched the 5 shares with the best likelihood of gaining +100% or extra within the coming months. Of these 5, Director of Analysis Sheraz Mian highlights the one inventory set to climb highest.
This prime decide is among the many most progressive monetary corporations. With a fast-growing buyer base (already 50+ million) and a various set of leading edge options, this inventory is poised for large beneficial properties. In fact, all our elite picks aren’t winners however this one may far surpass earlier Zacks’ Shares Set to Double like Nano-X Imaging which shot up +129.6% in little greater than 9 months.
Free: See Our High Inventory And 4 Runners Up
J & J Snack Meals Corp. (JJSF) : Free Inventory Evaluation Report
This text initially printed on Zacks Funding Analysis (zacks.com).
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
