J.M. Smucker (SJM) is trading 6% lower after its earnings release today.

Earnings per share (EPS) of $1.78 was up 18%, and $0.02 better than expectations. Sales were up 9% to $1.90 billion, a little bit less than forecast, with the growth driven by the Ainsworth pet food acquisition.

Excluding the acquisitions, sales were down slightly on flat volumes, no currency impact and a 1% decline in pricing. However, many of the company’s growth drivers, including Dunkin’ Donuts premium coffees and KCups, had good results.

The company maintained its previous EPS guidance for the April 2019 fiscal year of $8.40 to $8.65, despite the loss of income from the sale of its bakery business. However, the guidance does include a $0.15 per share one-time gain from the bakery business sale. Given the base excluding the gain on sale of $8.25 to $8.50 for the year, I believe current estimates for $8.80 in the April 2020 fiscal year are too high by about $0.10 to $0.15, which I believe is why the stock is selling off today.

I still like the shares. SJM is going through its transition phase well as it acquires growth while shedding its less profitable business. I was encouraged by the company’s statement on the conference call indicating it would look to reduce going forward, which I took as a sign that some of the heavy lifting in portfolio adjustments is done.

While current results are not inspiring, they are stable, and I believe my $120 target is very realistic even if estimates come down to $8.65 for the April 2020 fiscal year. I am revising my buy below price slightly higher to $108 from $105.