Campbell Soup Disappoints on Revenue Growth as Stay-at-Home Orders Ease

The Camden County, New Jersey-based soups and snacks maker Campbell Soup reported lower-than-expected revenue in the fiscal first quarter as COVID-19 curbs eased and consumers went out to eat more, affecting processed food sales.

In the first quarter ended October 31, Campbell Soup’s net sales decreased to $2.24 billion from $2.34 billion a year ago. This missed market expectations of $2.28 billion. As a result, earnings per share (EPS) decreased from $1.02 per share to $261 million, or $0.86.

However, that was above the Wall Street consensus estimate of $0.81 per share. The company will hold investor day virtually on December 14, 2021.

Campbell Soup stock fell 0.29% to $41.0 in pre-market trading on Wednesday. The stock slumped nearly 15% so far this year.

Campbell Soup Stock Price Forecast

Six analysts who offered stock ratings for Campbell Soup in the last three months forecast the average price in 12 months of $46.50 with a high forecast of $54.00 and a low forecast of $43.00.

The average price target represents a 13.08% change from the last price of $41.12. Of those six analysts, one rated “Buy”, four rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $46 with a high of $64 under a bull scenario and $25 under the worst-case scenario. The firm gave an “Equal-weight” rating on the packaged food company’s stock.

However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator signals a strong selling opportunity.

Analyst Comments

“High exposure to secularly challenged soup category: Shelf-stable soup (26.5% of sales) faces headwinds given shifts in preferences toward better-for-you and fresh foods, competition from private label, and pricing pressure. Snacking brands are well-positioned, but face competitive pressures: Milano, Goldfish, Farmhouse, and Snyder’s-Lance have strong brand equity but face high competition from PEP and MDLZ,” noted Pamela Kaufman, equity analyst at Morgan Stanley.

“Significant organizational changes over last two years refocused the company and show promise: Divesting non-core businesses and new leadership refreshes the company’s strategic plan, allowing the company to focus on its key segments and geographies.”

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