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On Thursday, Evercore ISI announced a reduction in the price target for Campbell Soup (NASDAQ:CPB) stock, adjusting it to $41 from the previous $46, while maintaining an In Line rating. The stock, currently trading at $33.79, has fallen significantly from its 52-week high of $52.80. The adjustment comes as a response to the company’s growth businesses, particularly its Snacks division, which is not performing as expected. According to InvestingPro data, the stock has declined over 25% in the past six months, though analysis suggests it may be undervalued at current levels.
The firm’s analysis indicates that Campbell’s Snacks segment, which accounts for 42% of sales and had a long-term organic growth target of 3-4%, is facing challenges. These include changes in consumer dietary habits, such as a trend towards lower carbohydrate intake, and increased competition from private label brands and new market entrants. Despite these challenges, InvestingPro data shows the company maintains strong fundamentals with total revenue of $10.12 billion and a healthy gross profit margin of 31.12%. For deeper insights into Campbell’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
The Meals & Beverage segment, making up 58% of sales with a 1-2% growth target, has shown some stability due to strong condensed soup and broth trends. However, this has been tempered by slower growth in the Rao’s brand.
Evercore ISI has revised its forecasts for Campbell Soup’s future performance, lowering the fiscal year 2026 consolidated organic sales growth expectation to flat, a change from the previously anticipated 1% increase. The firm also adjusted its earnings per share (EPS) prediction to $2.95 from $3.05.
The revised price target of $41 is based on a sum-of-parts analysis and corresponds to 14 times the calendar year 2026 price-to-earnings (P/E) ratio. This is a decrease from the previous valuation, which had the Snacks division trading at an enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple of 12 times, now lowered to 11 times. The Meals & Beverage segment’s valuation remains consistent with its center store peers at 10 times EV/EBITDA.
The firm also notes that potential tariffs could introduce additional headwinds, with a rough estimate suggesting a mid-single-digit impact to EPS. This factor, along with the necessity for increased growth investment due to the ongoing sales weakness in the Snacks division, has influenced the decision to lower the price target for Campbell Soup shares.
In other recent news, Campbell Soup Company (NYSE:CPB) has announced a regular quarterly dividend of $0.39 per share, payable on August 4, 2025, to shareholders on record by July 3, 2025. This move underscores the company’s commitment to returning value to investors. Meanwhile, Citi analyst Thomas Palmer revised the price target for Campbell Soup to $33, maintaining a Sell rating, with expectations of a slight earnings per share (EPS) beat for the fiscal third quarter of 2025 due to increased soup and broth consumption. Piper Sandler also adjusted its price target to $42 from $45, retaining an Overweight rating, while expressing concerns over potential EU tariffs impacting earnings.
TD Cowen held its Hold rating with a $36 target, citing anticipated tariff headwinds and a cautious outlook on revenue trajectory. UBS initiated coverage with a Sell rating and a $36 target, highlighting challenges in top-line growth and market share losses. Analysts from UBS anticipate that Campbell Soup may face outcomes below Wall Street forecasts due to these pressures. As Campbell Soup navigates these developments, investors will be closely monitoring the company’s upcoming earnings call for further insights.
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