Campbell Soup on the Big Money Menu

And the iconic food and beverage company could rise even more due to strong demand and a healthy dividend. But another likely reason is Big Money lifting the stock.

Big Money Likes Campbell Soup

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Campbell Soup has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the Big Money signals CPB has made the last year. As sentiment has turned bearish, CPB has been bought up.

The last few weeks have seen Big Money activity too. Each green bar signals big trading volumes as the stock ramped in price:

Source: www.mapsignals.com

In the last year, the stock attracted 10 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

Outperformance is important for leading stocks.

Campbell Soup Fundamental Analysis

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Campbell Soup has been growing earnings well and has a strong profit margin. Take a look:

  • 3-year EPS growth rate (+63.1%)
  • Profit margin (+11.9%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, CPB has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

CPB has a lot of qualities that are attracting Big Money, especially when steadiness is in high demand. It’s made the Top 20 report 49 times since 1990, with its first appearance on 04/02/1990…and gaining 718.6% since. The blue bars below show when Campbell Soup was a top pick:

Source: www.mapsignals.com

It’s been a top stock in the consumer staples sector according to the MAPsignals process. I wouldn’t be surprised if CPB makes additional appearances in the years to come. Let’s tie this all together.

Campbell Soup Price Prediction

The Campbell Soup rally could have further to go. Big Money buying in the shares is signaling to take notice. Shares could be positioned for further upside, plus it pays a current dividend of more than 3.2%. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds no positions in CPB at the time of publication.

Learn more about the MAPsignals process here.

Contact

https://mapsignals.com/contact/

Campbell Soup Missed Expectations for Quarterly Revenue

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.

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,” 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.

Check out FX Empire’s earnings calendar

Wall Street Week Ahead Earnings: Dick’s Sporting, Campbell Soup and Oracle in Focus

Investors have been rattled by geopolitical tensions over the Russia-Ukraine crisis, which has caused the global stock market to suffer. The S&P 500 plunged into correction territory.

If this tension continues for long, analysts fear that it will be harder for the U.S. Federal Reserve to raise rates after this month’s hike. Due to this, investors sought safe-haven assets and U.S. Treasury yields fell as tensions between Ukraine and Russia increased.

In addition, investors will focus on December quarter earnings for stocks that are economically sensitive, which should show better profits than technology stocks amid surging inflation.

Earnings By Day

Earnings Calendar For The Week Of March 7

Monday (March 7)

TICKER COMPANY EPS FORECAST
CIEN Ciena $0.36
CLAR Clarus $0.31
EGRX Eagle Pharmaceuticals $0.41
SQSP Squarespace $-0.03
VET Vermilion Energy $0.57

 

Tuesday (March 8)

IN THE SPOTLIGHT: DICK’S SPORTING

The sporting goods retailer Dick’s Sporting Goods is expected to deliver earnings per share of $2.75 in the holiday quarter, which represents year-over-year growth of over 13% from $2.43 per share seen in the same period a year ago.

The Coraopolis Pennsylvania-based company would post revenue growth of more than 5% to $3.29 billion from $3.13 billion a year earlier. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

Dick’s Sporting Goods (DKS) is in a favourable position given its category dominance, industry tailwinds, and healthy balance sheet. Its outlook within the category is likely to be even stronger post-COVID-19. We see a positive risk/reward skew based on our view the earnings power of the business is underappreciated. Key drivers include merchandise margin expansion and capital return (buybacks). We think there is upside for the stock without underwriting a higher valuation multiple as a result,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“The stock’s multiple has not broken out like it has for other retailers in our space which should emerge stronger post-COVID-19. The potential for multiple expansion adds optionality/upside to the bull case.”

A list of other earnings reports mentionable

COMPANY EPS FORECAST
ABM ABM Industries $0.82
BMBL Bumble $-0.02
WOOF Petco Health & Wellness $0.23
VTNR Vertex Energy $0.09

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 8

Wednesday (March 9)

IN THE SPOTLIGHT: CAMPBELL SOUP

The Camden, New Jersey-based soups and snacks maker Campbell Soup is expected to report earnings per share of $0.78 in the fiscal second quarter, which represents a year-over-year decline of over 7% from $0.84 per share seen in the same period a year ago.

Analysts expect that easing COVID-19 curbs and consumers eating out more would affect the company’s processed food sales. Campbell’s revenue was forecast to decline nearly 3% to $2.21 billion. However, it is worth noting that the maker of canned soup has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

“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.”

A list of other earnings reports mentionable

TICKER COMPANY EPS FORECAST
CPB Campbell Soup $0.78
EXPR Express $0.08
KFY Korn Ferry $1.48
LCUT Lifetime Brands $0.46
REVG REV Group $0.09
THO Thor Industries $2.91

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 9

Thursday (March 10)

IN THE SPOTLIGHT: ORACLE

The world’s largest database management company, Oracle, is expected to report earnings per share of $1.0 in the fiscal third quarter, which represents a year-over-year decline of nearly 3% from $1.03 per share seen in the same period a year ago.

The Austin, Texas-based computer technology corporation would post revenue growth of more than 4% to $10.5 billion from $10.1 billion a year earlier. The company has beaten consensus earnings estimates in most of the quarters in the last two years, at least.

“A preliminary look at a potential Oracle + Cerner Pro-forma model suggests modest EPS accretion by CY23, assuming Oracle shifts capital allocation priorities and halts the torrid pace of buybacks. Our illustrative analysis shows leverage exiting CY23 at 3.2x, assuming a deal at 32% cash/68% debt,” noted Keith Weiss, equity analyst at Morgan Stanley.

In December, several equity analysts raised their price targets after the database management company beat earnings estimates for the fiscal second quarter and forecasts profit and revenue above expectations for the ongoing quarter.

The company expects to earn $1.19 to $1.23 per share in the fiscal third quarter, higher than the Wall Street consensus estimates of $1.16. Revenue is expected to be $10.7 billion to $10.9 billion, above expectations of $10.56 billion, Reuters reported.

Oracle’s current low valuation at ~18x CY22e EPS reflects its slower growth rate compared to peers. Despite potential opportunities within existing database customers and cloud-based ERP applications, offsets from waning businesses mean 2021 likely lacks the catalysts for the positive inflection in revenue growth investors would need to see to drive multiples higher. With management guiding to mid-single-digit CC revenue growth in a software sector filled with strong secular growth stories, and operating margins declining in FY22 due to heightened investment in Cloud, we remain Equal-weight while our price target moves up to $87,” Weiss added.

A list of other earnings reports mentionable

TICKER COMPANY EPS FORECAST
GCO Genesco $2.53
JD JD.com $0.14
LZ LegalZoom.com $-0.09
MLNK MeridianLink $-0.02
PSTL Postal Realty Trust $0.23

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MARCH 9

Friday (March 11)

TICKER COMPANY EPS FORECAST
BKE Buckle $1.29
GENI Genius Sports $-0.23
PLXP PLx Pharma $-0.69
SPNE SeaSpine Holdings $-0.33

 

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.”

Check out FX Empire’s earnings calendar

Earnings Week Ahead: AutoZone, Campbell Soup, Lululemon and Broadcom in Focus

Earnings Calendar For The Week Of December 6

Monday (December 6)

Ticker Company EPS Forecast
SAIC Science Applications International $1.49
MDB MongoDB Inc -$0.38

 

Tuesday (December 7)

IN THE SPOTLIGHT: AUTOZONE

The Memphis, Tennessee-based auto parts retailer AutoZone is expected to report earnings per share of $20.78 in the fiscal first quarter, which represents year-over-year growth of about 12% from $18.61 per share seen in the same period a year ago.

The company, which is a major retailer and distributor of automotive replacement parts and accessories, is on track to beat earnings per share estimates again after having beaten it for 12 consecutive quarters. The company is expected to post revenue growth of about 6% to $3.33 billion.

The company is expected to earn $97.73 per share and generate $14.81 billion in revenue for the entire fiscal year, according to Zacks Research. These results demonstrate increases of 2.67 % and 1.22 % over last year, respectively.

“We see AutoZone (AZO) as a high-quality retailer with the ability to compound earnings/FCF growth over time. While not immune to a tougher macro backdrop (fewer miles driven), we believe AZO is best positioned through any recession given its leading exposure to the more defensive DIY segment (~80% of sales),” noted Simeon Gutman, equity analyst at Morgan Stanley.

“In addition, its DIFM growth was accelerating pre-COVID-19 and we think it can gain more share in that segment going forward. In our view, ongoing share gains coupled with solid expense management should allow AZO to overcome headwinds from less driving in the near- to medium-term. These advantages seem priced in currently.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE DECEMBER 7

Ticker Company EPS Forecast
AZO AutoZone $20.71
AHT Ashtead Group £0.62
S Sprint -$0.18
TOL Toll Brothers $2.48
CASY Casey’s General Stores $2.79
HRB H&R Block -$0.94

 

Wednesday (December 8)

Ticker Company EPS Forecast
UNFI United Natural Foods $0.58
KFY Korn Ferry International $1.37
THO Thor Industries $2.70
RH Restoration Hardware $6.62
GEF Greif $1.47
GME GameStop -$0.52
CPB Campbell Soup $0.81

 

Thursday (December 9)

IN THE SPOTLIGHT: LULULEMON ATHLETICA, BROADCOM

LULULEMON: The Vancouver-based healthy lifestyle-inspired athletic retailer is expected to report its fiscal third-quarter earnings of $1.40 per share, which represents year-over-year growth of over 20% from $1.16 per share seen in the same period a year ago.

The apparel retailer would post year-over-year sales growth of about 28% to $1.43 billion. In the last two years, the company has beaten earnings per share (EPS) estimates most of the time.

Sales are expected to be $1.4-$1.43 billion in the third quarter of fiscal 2021, representing a two-year CAGR of 24-25%. The gross margin is expected to increase 50-100bps compared to the second quarter of fiscal 2019. The company expects adjusted earnings to be between $1.33 and $1.38 per share, compared with $1.16 in the prior-year quarter and 96 cents in the third quarter of fiscal 2019, according to ZACKS Research.

Net revenues are expected to reach $6.19-$6.26 billion for fiscal 2021 compared with $5.83-$5.91 billion earlier. Earnings per share will be $7.38-$7.48 versus $6.73-$6.86 previously mentioned.

Lululemon Athletica (LULU) is a long-term topline grower, supported by compelling secular tailwinds (e.g., performance/athleisure focus), a market share gain opportunity, & credible future revenue driver (e.g., international expansion, digital growth, & product innovation/expansion into new categories). The company’s recent MIRROR acquisition offers both revenue & profitability upside, as reflected in our bull case,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

LULU dominates the NA athletic yoga apparel category due to its unique brand positioning & fashionable products. Covid accelerated consumers health & wellness focus & fashion casualization, both of which should benefit LULU.”

BROADCOM: The chipmaker and software infrastructure supplier is expected to report its fiscal fourth-quarter earnings of $7.74 per share, which represents year-over-year growth of over 21% from $6.35 per share seen in the same period a year ago. The semiconductor manufacturer would post revenue growth of nearly 14% to $7.35 billion.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE DECEMBER 9

Ticker Company EPS Forecast
SMDS Ds Smith £16.10
FIZZ National Beverage $0.50
HRL Hormel Foods $0.50
CIEN Ciena $0.86
ORCL Oracle $1.11
LULU Lululemon Athletica $1.40
AVGO Broadcom Inc $7.74
MTN Vail Resorts -$3.66
COST Costco Wholesale $2.57

 

Friday (December 10)

No major earnings are scheduled for release.

Earnings to Watch in Holiday-Shortened Week: Zoom, Medtronic, Best Buy, Dollar Tree and Deere in Focus

Earnings Calendar For The Week Of November 22

Monday (November 22)

IN THE SPOTLIGHT: ZOOM

The San Jose, California-based communications technology company Zoom is expected to report its fiscal third-quarter earnings of $1.09 per share, which represents year-over-year growth of over 10% from $0.99 per share seen in the same period a year ago.

The company, which provides video telephony and online chat services through a cloud-based peer-to-peer software platform, would post revenue growth of over 30% to $1.02 billion. Zoom will report 3Q FY22 earnings after market close on Monday, November 22.

“Investors lean cautious heading into FQ3 print given ongoing concerns around SMB churn, particularly as other WFH names have underperformed. View FQ4 print as having more favourable risk/reward, but given cautious positioning, could see outperformance if SMB churn is better than expected,” noted Meta Marshall, equity analyst at Morgan Stanley.

Zoom has established its position as the leader in video conferencing, now a growth market. The company has a meaningful competitive moat built on more than just architecture. Position within customers makes an attractive opportunity to expand into the broader UC market. Early wins are encouraging. Opportunities to expand the platform remain. Manageable churn post-COVID as a move to hybrid work setups.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE NOVEMBER 22

Ticker Company EPS Forecast
JKS JinkoSolar Holding Co. Ltd. ADR -$0.07
GRFS Grifolsbarcelona $0.29
JOBS 51job $4.45
GGAL Grupo Financiero Galicia $0.68
ZM Zoom Video Communications $1.09
A Agilent $1.18
KEYS Keysight Technologies $1.64
URBN Urban Outfitters $0.83
BMA Banco Macro $1.22
TLK Telekomunikasi Indns Tbk Prshn Pp Pt $0.46

Tuesday (November 23)

IN THE SPOTLIGHT: MEDTRONIC, BEST BUY, DOLLAR TREE

MEDTRONIC: The medical device company is expected to report its fiscal second-quarter earnings of $1.29 per share, which represents year-over-year growth of over 26% from $1.02 per share seen in the same period a year ago.

The company has beaten earnings per share (EPS) estimates all times in the last four quarters with a surprise of over 13%. The Fridley, Minnesota-based medical company would post revenue growth of nearly 4% to $7.9 billion.

Medtronic (MDT) commentary and guide should act as a barometer for MedTech recovery through the balance of ’21 and into ’22. More muted recovery through October could incrementally pressure 2FQ, with the path to 9% y/y FY22 growth looking increasingly challenging in the face of recent sector headwinds,” noted Cecilia Furlong, equity analyst at Morgan Stanley.

BEST BUY: The Richfield, Minnesota consumer electronics retailer is expected to report its fiscal third-quarter earnings of $1.93 per share, which represents a year-over-year decline of over 6% from $2.06 per share seen in the same period a year ago.

The consumer electronics retailer’s revenue would decline 2.5% to $11.56 billion down from $11.85 billion a year earlier. It is worth noting that in the last two years the company has delivered an earnings share price (EPS) at all times.

“Market looking for a 4-5% comp in Q3 vs cons at -1.5%. We see upside to 2H’21 numbers and expect a raised full-year guide as demand remains strong. That said, momentum is slowing and the category could shrink in ’22/’23. The stock is +15% in the last month, and a Q3 beat and raise seems priced in,” noted Simeon Gutman, equity analyst at Morgan Stanley.

DOLLAR TREE: The Chesapeake, Virginia-based company is expected to report earnings of $0.96 per share in the third quarter, down over 30% from $1.39 per share seen in the same period a year ago. But the discount variety stores that sells items for $1 or less would post revenue growth of nearly 4% to $6.4 billion.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE NOVEMBER 23

Ticker Company EPS Forecast
CPG Compass Group £17.93
BYG Big Yellow £19.26
MDT Medtronic $1.29
BBY Best Buy $1.93
DLTR Dollar Tree $0.96
J Jacobs Engineering Group Inc $1.57
BURL Burlington Stores $1.24
SJM J.M. Smucker $2.04
DKS Dick’s Sporting Goods $2.03
PLAN Progressive Planet -$0.11
AEO American Eagle Outfitters $0.60
ANF Abercrombie & Fitch $0.65
DY Dycom Industries $0.75
JWN Nordstrom $0.56
NOAH Noah $2.95
VMW VMware $1.54
HPQ HP $0.88
GME GameStop -$0.51
CPB Campbell Soup $0.81
GPS Gap $0.50
SVT Severn Trent £49.79

Wednesday (November 24)

IN THE SPOTLIGHT: DEERE

Deere & Company, the world’s largest maker of farm equipment, is expected to report its fiscal fourth-quarter earnings of $3.92 per share, which represents year-over-year growth of over 64% from $2.39 per share seen in the same period a year ago.

The agricultural, construction and forestry equipment manufacturer would post revenue growth of more than 20% to $10.5 billion. It is worth noting that in the last two years the company has delivered an earnings share price (EPS) at all times.

“Despite positive secular demand fundamentals within both the Ag and Construction businesses we are lowering near-term estimates for Deere (DE) (F4Q21/F1Q22) to better reflect the impact from lost production in the US stemming from supplier bottlenecks and the labour strike,” noted Stephen Volkmann, equity analyst at Jefferies.

“We assume any lost production elongates the cycle, and we maintain our above Consensus estimates for 2023 noting additional upside from the infrastructure bill has yet to be factored into outlooks.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE NOVEMBER 24

Ticker Company EPS Forecast
UU United Utilities £25.21
JMAT Johnson Matthey £44.57
BVIC Britvic £31.37
DE Deere & Company $3.92
TCOM Trip.com Group Ltd $0.11
KC Kutcho Copper -$1.53

Thursday (November 25)

No major earnings are scheduled for release. The U.S. stock market will be closed for the Thanksgiving holiday.

Friday (November 26)

No major earnings are scheduled for release. The U.S. stock market will be closed for the Thanksgiving holiday.

Campbell Soup Tops Earnings Estimates, Fiscal 2022 Outlook Disappoints

The Camden County, New Jersey-based soups and snacks maker Campbell Soup reported higher-than-expected earnings and revenue in the fiscal fourth quarter but forecast profit and sales below expectations in its fiscal 2022 year.

The processed food and snack company said its earnings Per Share (EPS) from continuing operations were $0.95 and adjusted EPS fell $0.08, or 13%, to $0.55. It was still higher than Wall Street consensus estimates of $0.47 per share.

The company’s net sales slumped 11% versus the prior year to $1.87 billion compared to $2.11 billion registered a year ago. That was still higher than the market expectations of $1.81 billion.

The board of directors also approved a $500 million strategic share repurchase program that pushed the Campbell Soup shares up over 1.4% to $42.33 in pre-market trading on Wednesday. The stock fell about 13% so far this year.

Campbell forecasts adjusted earnings of $2.75-2.85 per share for fiscal 2022, and net sales of flat to a 2% decline. According to Reuters, those expectations were lower compared to market estimates of $2.87 per share and nearly 1% decline, respectively.

According to the company, the first quarter will be the most challenging since sales and scale efficiencies have increased since a year ago, while pricing has begun to take effect. “First half margins will continue to be impacted by transitional headwinds, with comparisons easing and sequential improvement in the second half of the fiscal year versus a year ago.”

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.”

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 $47.71 with a high forecast of $59.00 and a low forecast of $41.00.

The average price target represents a 14.33% change from the last price of $41.73. From those seven analysts, one rated “Buy”, six rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $48 with a high of $66 under a bull scenario and $30 under the worst-case scenario. The firm gave an “Equal-weight” rating on the packaged food company’s stock.

Several other analysts have also updated their stock outlook. Jefferies slashed the target price to $45 from $50. JPMorgan lowered the price target to $45 from $46. Credit Suisse cut the price objective to $41 from $46.

Check out FX Empire’s earnings calendar