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On Tuesday, Stifel analysts lowered the price target for Campbell Soup (NASDAQ: NYSE:CPB) stock to $38 from $40, while maintaining a Hold rating. Currently trading at $34.25, InvestingPro analysis suggests the stock is undervalued, with a Fair Value calculation based on multiple valuation methods. The revision comes as the company reported its third-quarter earnings, which exceeded expectations despite a 3% decline in earnings per share (EPS) to $0.73. This figure was $0.08 above both Stifel’s and the consensus estimates. The company has demonstrated solid revenue growth of 8.65% over the last twelve months, while maintaining an attractive dividend yield of 4.55%.
Campbell’s Meals and Beverages division continues to perform well, with market share gains in its soup portfolio. However, the recovery in the Snacks division is proving slower than anticipated, influenced by weaker category trends and increased competition. This prolonged recovery has led Campbell to project EPS at the low end of its range.
The company’s guidance for the fourth quarter does not account for the potential impact of tariffs, which are expected to reduce EPS by $0.03 to $0.05. As a result, Stifel has adjusted its EPS estimates for fiscal years 2025 and 2026 to reflect these challenges in the Snacks division and the anticipated tariff effects.
Stifel analysts emphasized their continued Hold rating for Campbell Soup, incorporating the revised estimates into their new price target of $38. InvestingPro subscribers can access additional insights, including two more exclusive ProTips and a comprehensive Pro Research Report, which is part of the platform’s coverage of over 1,400 US stocks.
In other recent news, Campbell Soup has faced several developments impacting its financial outlook and stock ratings. The company reported a third-quarter earnings per share (EPS) of $0.73, surpassing consensus estimates by $0.08, yet this represented a 3% decline. Analysts from Stifel and Jefferies noted the company’s challenges in the Snacks segment and the impact of tariffs, adjusting their price targets to $38 and $34, respectively, while maintaining Hold ratings. BofA Securities also lowered its price target to $33, citing shipment timing issues and softer trends in the Snacks segment, and revised its fiscal year 2025 and 2026 EPS estimates downward.
Barclays (LON:BARC) analysts reduced Campbell Soup’s stock price target to $35, maintaining an Underweight rating, and highlighted potential fiscal year 2026 challenges, including tariffs and increased brand support spending. Citi analysts further lowered their price target to $32, emphasizing concerns about earnings growth prospects amid cost inflation and weak demand in the Snacks category. Campbell Soup’s management has acknowledged these issues and is considering strategic adjustments to address them, including changes in sourcing, pricing, and marketing strategies. The company continues to face headwinds from tariffs, which are expected to impact earnings in the coming quarters. These developments have led to cautious outlooks from analysts as Campbell Soup navigates ongoing market challenges.
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