Bank of America upgraded J.M. Smucker to Buy from Neutral and raised its price target to $130 from $120, citing easing concerns over the 2023 Hostess Brands acquisition. The firm downgraded General Mills to Neutral from Buy, cutting its price target to $48 from $55 amid slower-than-expected recovery in key segments.

BofA analysts said Smucker's integration of Hostess, which was written down by about $2 billion, now accounts for roughly 11% of revenue, down from 15%, reducing downside risk. The bank expects Smucker to maintain fiscal third-quarter guidance when reporting results on Feb. 26, with a path to about $10 in earnings per share by fiscal 2027. Coffee price deflation may weigh on organic sales, but lower input costs should boost margins.

For General Mills, BofA sees a more prolonged recovery, with consumer spending among low- and middle-income households rebounding slower than anticipated. The firm expects volume and sales improvement to remain subdued over the next 12 months, with Blue Buffalo yet to reaccelerate. BofA noted that roughly 70% to 75% of Smucker's revenue comes from coffee, pet food, peanut butter, and international operations, categories with limited exposure to GLP-1 weight-loss drugs.