Is The J. M. Smucker Co. overvalued or undervalued?

As of 27 February 2025, The J. M. Smucker Co. has moved from an expensive to a risky valuation grade. The company appears to be overvalued based on its current metrics. The P/E ratio stands at 23, which is significantly higher than the peer average of 19.69 for companies like McCormick & Co., Inc. and 13.54 for Lamb Weston Holdings, Inc. Additionally, the EV to EBITDA ratio of 11.27 also exceeds the peer average, indicating a premium valuation compared to its competitors.
The company's ROCE is 10.95% and ROE is 10.03%, which are relatively modest, especially when compared to the attractive valuations of peers like Conagra Brands, Inc. with a P/E of 9.05 and an EV to EBITDA of 10.38. Furthermore, the stock has underperformed against the S&P 500 over various time frames, including a year-to-date decline of 11.61% compared to a 2.44% gain for the index. Overall, these factors suggest that The J. M. Smucker Co. is currently overvalued in the market.