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Campbell Soup Disappoints in 4Q17, Stock Took a Beating

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Part 4
Campbell Soup Disappoints in 4Q17, Stock Took a Beating PART 4 OF 4

Campbell Soup: Most Analysts Remain Neutral on the Stock

Most analysts remain neutral

Most of the analysts covering Campbell Soup (CPB) stock maintain a neutral outlook. Slower sales, a soft outlook on the profitability front, and lower YoY (year-over-year) share buybacks in fiscal 2018 are keeping analysts on the sidelines. The company reported lower sales for three consecutive quarters. The trend will likely continue in fiscal 2018. A slight improvement in the Campbell Fresh and Global Biscuits and Snacks segments is expected to be more than offset by lower soup and V8 beverage sales. Meanwhile, increased input costs and lower share repurchases compared to fiscal 2017 are expected to impact the bottom-line growth.

Campbell Soup: Most Analysts Remain Neutral on the Stock

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Following Campbell Soup’s weak fiscal 4Q17 results and soft guidance on the sales and margins front, a few analysts lowered their target price on the stock. An analyst at Deutsche Bank reduced Campbell Soup’s target price to $51.00 from $58.00. Meanwhile, a Credit Suisse analyst lowered Campbell Soup’s target price to $43.00 from $47.00.

Rating summary

Analysts gave Campbell Soup stock a score of 3.2 on a scale of 1.0 to 5.0—1.0 represents “strong buy” and 5.0 denotes “strong sell.” Meanwhile, 17 analysts provide recommendations on Campbell Soup stock—12.0% maintained a “buy” rating, 59.0% recommended a “hold,” and 29.0% have a “sell” rating. As of August 31, 2017, Campbell Soup stock closed at $46.20, which reflects an upside potential of 11.3%—compared to analysts’ target price of $51.43 per share.

Peer comparisons

Most of the analysts’ covering General Mills (GIS), Kellogg (K), and J. M. Smucker (SJM) stock maintain a neutral outlook. Industry-wide softness and retailers’ inventory destocking will likely impact these companies’ financials. In contrast, analysts remain confident about Conagra (CAG) and Kraft Heinz (KHC) stock.

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