Campbell Soup Company (CPB), headquartered in Camden, New Jersey, manufactures and markets branded convenience food and beverage products. Valued at $14.5 billion by market cap, the company's core divisions include soups and sauces, biscuits and confectionery, and foodservice. It sells its products through retail food chains, mass discounters and merchandisers, club stores, convenience stores, drug stores, and dollar stores.
Shares of this leading packaged food manufacturer have underperformed the broader market considerably over the past year. CPB has gained 10.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 21.7%. In 2024, CPB’s stock rose 12.7%, compared to the SPX’s 13.9% rise on a YTD basis.
Narrowing the focus, CPB has surpassed the First Trust Nasdaq Food & Beverage ETF (FTXG). The exchange-traded fund has declined about 6.3% over the past year. Moreover, CPB’s double-digit returns on a YTD basis outshine the ETF’s 1.4% gains over the same time frame.
CPB's strong overall performance is attributed to its recent acquisition of Sovos Brands, improvements in supply chain productivity, and cost savings.
However, on Jun. 5, CPB shares fell more than 1% after reporting its Q3 results. Its adjusted EPS of $0.75 surpassed Wall Street expectations of $0.70. The company’s revenue was $2.37 billion, surpassing Wall Street forecasts of $2.34 billion. While CPB cut its full-year adjusted EPS estimate to $3.07 to $3.10 from a previous forecast of $3.09 to $3.15, the company updated its net sales growth to the range of 3% to 4% based on the incremental impact of the Sovos Brands acquisition.
For the current fiscal year, which ended in July, analysts expect CPB’s EPS to grow 2.7% to $3.08 on a diluted basis. The company’s earnings surprise history is impressive. It beat or matched the consensus estimate in each of the last four quarters.
Among the 15 analysts covering CPB stock, the consensus is a “Hold.” That’s based on three “Strong Buy” ratings, nine “Holds,” one “Moderate Sell,” and two “Strong Sells.”
On Jul. 19, Barclays analyst Andrew Lazar maintained a “Sell” rating on CPB with a price target of $45, implying a potential downside of 7.6% from current levels.
While CPB currently trades above its mean price target of $47.13, the Street-high price target of $52 suggests an upside potential of 6.8%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
