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On Friday, Piper Sandler adjusted its price target for Campbell Soup (NYSE:CPB) Company (NASDAQ:CPB), reducing it to $42 from the previous $45, while retaining an Overweight rating on the stock. The decision comes amid concerns about the impact of European Union (EU) tariffs on the company’s earnings. Trading at $33.50, the stock has declined over 24% in the past six months and currently sits near its 52-week low of $32.95. InvestingPro analysis suggests the stock is undervalued at current levels, with additional insights available in the comprehensive Pro Research Report.
Campbell Soup, known for its iconic canned soups, remains susceptible to EU tariffs that have been temporarily halted for 90 days. The company faces a potential 8-9% earnings per share (EPS) headwind should these tariffs be reinstated. Piper Sandler’s analyst acknowledged the unpredictability of tariff developments and chose not to alter earnings estimates in light of the EU tariffs. Despite these challenges, InvestingPro data shows the company has maintained dividend payments for 55 consecutive years, demonstrating strong financial resilience.
The company imports tomato sauce from Italy for its Rao’s pasta and pizza sauces. Additionally, Campbell Soup is approximately six years into its La Regina contract, which limits its options to relocate production to the United States, even if it were feasible. Furthermore, the company is contending with increased steel costs, presumably due to tariff hikes, which are expected to be passed on to Campbell Soup despite its annual steel cost contracts.
While maintaining its $3.00 forecast for fiscal year 2025 EPS, Piper Sandler has revised its fiscal year 2026 EPS estimate downward from $3.20 to $3.08. The firm notes there is a downside risk to these estimates if EU tariffs are implemented. The new $42 price target reflects approximately 14 times Piper Sandler’s projected calendar year 2026 EPS for Campbell Soup. Currently trading at a P/E ratio of 19.15x, the company maintains solid profitability metrics with a gross margin of 31.12%. For deeper insights into Campbell Soup’s valuation and financial health metrics, access the full analysis on InvestingPro, where you’ll find exclusive ProTips and comprehensive financial data.
In other recent news, Campbell Soup Company announced a regular quarterly dividend of $0.39 per share, set to be paid on August 4, 2025, to shareholders of record by July 3, 2025. This move underscores the company’s commitment to providing returns to its investors. Meanwhile, analysts have been adjusting their outlook on Campbell Soup. TD Cowen maintained a Hold rating with a $36 target, expressing concerns over tariff-related challenges and revising earnings projections for fiscal years 2025 and 2026.
Citi analyst Thomas Palmer lowered the price target to $33 from $37, retaining a Sell rating due to anticipated cost pressures and consumption trends impacting profitability. UBS also initiated coverage with a Sell rating and a $36 target, citing challenges in achieving top-line growth and potential market share losses. In a strategic move, Campbell Soup announced leadership changes, appointing Elizabeth Duggan as President of the Snacks division and Janda Lukin as Chief Growth Officer, aiming to strengthen its growth trajectory. These developments reflect the company’s ongoing efforts to navigate industry challenges and enhance its competitive position.
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