The Camden County, New Jersey-based soups and snacks maker Campbell Soup reported lower-than-expected revenue in the fiscal second quarter as COVID-19 curbs eased and consumers went out to eat more, affecting processed food sales.
The Camden New Jersey-based reported quarterly adjusted earnings of 0.69 cents per share, lower than the Wall Street consensus estimates of $0.78 per share. In addition, the company said its revenue fell more than 3% to $2.2 billion from a year earlier. That too missed the analysts’ expectations of $2.24 billion.
“Volumes more pressured than expected, but promos lifted in Snacks, driving pricing higher. FY’22 guide reiterated. H2 implied EPS of $1.17-1.27 vs. $1.15 consensus, with the delta driven by margin improvement; consensus close to sales forecast at the midpoint. Stock likely flat on the day given recent pullback,” noted Rob Dickerson, equity analyst at Jefferies.
The soups and snacks maker forecasts full-year adjusted earnings in the range of $2.75-$2.85 per share.
At the time of writing, Campbell Soup stock traded 1.6% higher at $42.98 on Wednesday. However, the stock fell 0.20% so far this year after slumping over 10% in 2021.
“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,” noted Pamela Kaufman, equity analyst at Morgan Stanley.
“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. Significant organizational changes over the 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.”
Campbell Soup Stock Price Forecast
Seven analysts who offered stock ratings for Campbell Soup in the last three months forecast the average price in 12 months of $46.00 with a high forecast of $50.00 and a low forecast of $43.00.
The average price target represents an 8.75% change from the last price of $42.30. Of those seven analysts, one rated “Buy”, six rated “Hold”, while none rated “Sell”, according to Tipranks.
Morgan Stanley gave the base target price to $45 with a high of $61 under a bull scenario and $22 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the packaged food company’s stock.
Several analysts have also updated their stock outlook. Deutsche Bank raised the target price to $46 from $45. JPMorgan cut the target price to $44 from $45. Piper Sandler lifted the price objective to $45 from $43. Credit Suisse upped the target price to $43 from $41.
However, technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator shows a selling opportunity.
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