On Wednesday, Jefferies adjusted its outlook on Campbell Soup (NASDAQ:CPB), reducing the price target to $46.00 from the previous $52.00. The firm maintained its Hold rating on the stock.
The reassessment comes amid a shift in the company's performance dynamics, with Snacks now presenting more challenges compared to the Meals & Beverages (M&B) segment, which was the focus of concern at the same time last year.
According to Jefferies, certain Campbell Soup brands like Swanson, Farmhouse, Prego, and Pace have experienced robust volume growth over the last twelve weeks. This trend aligns with a consumer pivot towards at-home and healthier eating habits. However, the performance of numerous snack brands and core Campbell's soup products has been less favorable.
The analyst's commentary highlights the difficulty in achieving the long-term growth target of 3-4% for the Snacks division, given the current market conditions. The reiterated Hold rating suggests a neutral stance on the company's stock, with the revised price target reflecting the analyst's updated valuation based on recent developments.
In other recent news, The Campbell's Company, formerly known as Campbell Soup Company (NYSE:CPB), has undergone a rebranding initiative to reflect its diverse product range.
In addition to this, key leadership changes have been announced with Daniel L. Poland promoted to Executive Vice President and Chief Enterprise Transformation Officer, and Cassandra Green appointed as Senior Vice President and Head of Supply Chain. The company has also sold its noosa yoghurt business to Lakeview Farms, aligning with its focus on core business.
The Campbell's Company successfully raised $1.15 billion through an offering of senior unsecured notes. Analyst firms Bernstein SocGen Group and Argus have upgraded the stock rating, while DA Davidson and Citi have downgraded it. The company's Goldfish brand continues to be a top preferred snack among teenagers.
In terms of financial projections, The Campbell's Company has projected net sales growth of approximately 9% to 11%, adjusted EBIT growth of 9% to 11%, and an increase in adjusted earnings per share of 1% to 4% for fiscal year 2025.
InvestingPro Insights
Campbell Soup's financial metrics and market performance offer additional context to Jefferies' analysis. According to InvestingPro data, the company's revenue growth has been modest, with a 2.98% increase over the last twelve months. However, the quarterly revenue growth for Q4 2024 was more robust at 10.88%, potentially reflecting the strength in certain brands mentioned by Jefferies.
The company's P/E ratio (adjusted) of 14.96 suggests a relatively reasonable valuation compared to the broader market. This, coupled with a dividend yield of 3.4%, may appeal to value and income-focused investors. An InvestingPro Tip highlights that Campbell Soup has maintained dividend payments for 54 consecutive years, underscoring its commitment to shareholder returns despite market fluctuations.
Another InvestingPro Tip indicates that analysts predict the company will be profitable this year, aligning with Jefferies' Hold rating and suggesting stability despite challenges in the Snacks division. The company's profitability over the last twelve months, as noted by a third InvestingPro Tip, further supports this outlook.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights beyond those mentioned here. The platform currently lists several more tips that could provide valuable perspective on Campbell Soup's financial health and market position.
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