Persisting challenges keeps analysts on the sidelines
The majority of analysts prefer to remain on the sidelines in terms of the Campbell Soup Company (CPB) stock as sales and margin headwinds are likely to restrict its upside potential. Campbell’s top line is expected to remain weak in the coming quarters driven by a continued fall in soup and V8 beverage sales.
However, innovation-led new products and benefits from the company’s Pacific Foods acquisition should positively impact its sales.
Besides weak sales, margin pressure from increased commodity prices, an unfavorable mix, and higher manufacturing and logistics costs could restrain its bottom line growth. However, a lower tax rate and share buybacks could drive its earnings higher in the coming quarters.
Rating summary and target price
Of the 16 analysts providing recommendations on Campbell stock, 56.0% have suggested “holds” as low growth expectations have kept analysts on the sidelines. Notably, 25.0% of analysts have recommended “sells,” and 19.0% have maintained “buys” on CPB stock. Analysts maintain a price target of $48.43 on CPB, which reflects a potential upside of ~5% to its closing price of $46.17 as of February 16, 2018.
Alongside Campbell Soup, analysts maintain neutral outlooks on General Mills (GIS), the Hershey Company (HSY), the J. M. Smucker Company (SJM), and the Kellogg Company (K) stocks as persisting sales and margin headwinds are expected to restrict their upsides.