Bernstein ponders takeover targets for J.M. Smucker after pet food sale

J.M. Smucker’s (SJM) plans to sell several of its pet food brands to Post Holdings for $1.2B has Bernstein analyst Alexia Howard wondering how the company will replace the lost EBITDA. J.M. Smucker’s comment that it anticipates replacing the divested earnings through the deployment of transaction proceeds “implies fairly clearly that management is looking to do another deal,” the analyst tells investors in a research note. Bernstein now wonders whether Freshpet (FRPT) could be in J.M.’s sights as a premium pet food business. Beyond pet food, it is possible that Simply Good Foods (SMPL) or even BellRing Brands (BRBR) are “distant possibilities” as possible targets for J.M. Smucker, contends the analyst. Bernstein rates Smucker with an Underperform and $128 price target.