Campbell’s Company Shares Struggle Amid Mixed Earnings Results

With a market cap of $10.5 billion, The Campbell’s Company (CPB) produces and sells food and beverage products in both the United States and internationally. Founded in 1869 and headquartered in Camden, New Jersey, the company operates through two main segments: Meals & Beverages and Snacks.

Over the past year, Campbell’s Company has significantly underperformed relative to the broader market. CPB’s stock prices have dropped by 21.8% over the last 52 weeks and are down 14.2% year-to-date (YTD). In contrast, the S&P 500 Index ($SPX) has risen by 11.9% in the same period, with a slight YTD decline.

Examining more closely, CPB has also lagged behind the Consumer Staples Select Sector SPDR Fund (XLP), which saw a 4.4% increase over the past year and a 3.1% gain YTD.

On March 5, CPB shares fell 2.9% following the release of its Q2 earnings. The company reported revenue of $2.7 billion, which fell short of analyst expectations. Organic sales decreased by 2% during the quarter, raising doubts about the strength of its core business. Despite these concerns, CPB’s earnings per share (EPS) of $0.74 exceeded analyst estimates by 1.4%.

Looking ahead to the current year ending in July, analysts forecast a 2.9% decline in CPB’s EPS, projecting it to drop to $2.99 year-over-year. Notably, the company has beaten analysts’ consensus estimates in each of the past four quarters.

Among the 19 analysts covering CPB, the consensus rating is a “Hold.” This rating comprises four “Strong Buy” recommendations, ten “Holds,” one “Moderate Sell,” and four “Strong Sells.”

The consensus outlook has become less optimistic compared to three months ago, when five analysts rated it as a “Strong Buy.”

On April 23, UBS Group AG (UBS) analyst Peter Grom initiated coverage of Campbell’s with a “Sell” recommendation and set a price target of $36.

Currently, CPB’s mean price target stands at $41.21, suggesting a potential upside of 14.7% from present market prices. Moreover, the highest target of $48 indicates an impressive possible growth of 33.6% from current levels.

On the date of publication, Kritika Sarmah 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.

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