Campbell's
CPB
$20.73
-2.49%
The Campbell's Company is a 150-plus-year-old domestic packaged food manufacturer whose portfolio spans soups, sauces, beverages, and snacks, with meals and beverages contributing roughly 61% of revenue and snacks 39% in fiscal 2026; flagship brands include Campbell's, Pepperidge Farm, Goldfish, Snyder's of Hanover, Swanson, Prego, Pace, V8, and the recently acquired Rao's, with about 90% of sales generated in the US. It is a mature, brand-owning staple in the Consumer Defensive sector — a shelf-stable cash-generative incumbent rather than a growth disruptor, competing on brand equity, shelf space, and distribution against peers like General Mills, Kraft Heinz, and Conagra. The current investor narrative is dominated by a sharp deterioration in fundamentals: a fiscal Q4 earnings miss, a dividend cut, and weak guidance have reframed CPB as a turnaround and margin-repair story, compounded by its removal from the S&P 500 and a roughly 7% dividend yield that the market now treats as a distress signal rather than income support. Debate centers on whether cost cuts and margin repair can stabilize the business before volume erosion and leverage force further negative revisions.…
CPB
Campbell's
$20.73
Related headlines
Investment Opinion: Should I buy CPB Today?
Rating: Hold. The core thesis is that CPB offers deep value and a high dividend yield, but the fundamental deterioration and lack of near-term catalysts justify a wait-and-see approach. The analyst consensus is 'hold' with an average target of $20.79, implying only 4.6% upside from the current $19.87, and the recommendation mean of 3.3 reflects cautious sentiment. Supporting evidence includes a forward PE of 10.8x, which is low relative to the market, and a price-to-sales ratio of 0.68x, suggesting the stock is cheap. However, revenue fell 7.9% year-over-year in Q4, and the net margin is a thin 4.1%, with a Q4 net loss. Free cash flow of $678 million is a positive, but the dividend payout ratio of 116.6% of trailing EPS raises sustainability concerns. The biggest risks are continued volume erosion, leverage (debt-to-equity 1.85x), and liquidity (current ratio 0.82). The rating would upgrade to Buy if gross margins stabilize above 28% and revenue declines moderate to low single digits, or if the dividend is right-sized and the balance sheet improves. It would downgrade to Sell if revenue declines accelerate beyond 10% or if liquidity deteriorates further. Relative to its history, CPB is undervalued, but the discount reflects real risks; fair value is likely around the analyst average target of $20.79.
Sign up to view all
CPB 12-Month Price Forecast
The forward-looking view is neutral with medium confidence. CPB is a deeply discounted stock with a 7% dividend yield and strong free cash flow, but the fundamental deterioration is severe, with revenue declines and a net loss in Q4. The analyst consensus is hold, and the average target suggests limited upside. The key tension is whether cost cuts can stabilize margins before volume erosion and leverage force further negative revisions. An upgrade to bullish would require evidence of gross margin stabilization above 28% and moderating revenue declines, while a downgrade to bearish would follow a further acceleration in revenue declines or a liquidity crisis.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Campbell's's 12-month outlook, with a consensus price target around $20.79 and implied upside of +0.3% versus the current price.
Average Target
$20.79
0 analysts
Implied Upside
+0.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$16 - $42
Analyst target range
Bulls vs Bears: CPB Investment Factors
The bear case currently has stronger evidence: CPB is in the midst of a fundamental deterioration with a Q4 revenue decline of 7.9%, a net loss, a dividend cut, and removal from the S&P 500. The bull case rests on deep value (10.8x forward EPS), strong free cash flow ($678 million), and the potential for margin repair through cost cuts, but these are forward-looking hopes against a backdrop of confirmed weakness. The single most important tension is whether management's cost-cutting and margin-repair efforts can stabilize volumes and earnings before leverage and liquidity concerns force further negative revisions. If gross margins stabilize above 27% and revenue declines moderate, the stock could re-rate; otherwise, the downtrend may persist.
Bullish
- Deep value on forward earnings: At $19.87, CPB trades at just 10.8x forward EPS of $2.01 and 0.68x sales, with an EV/EBITDA of 10.5x — a discount to typical packaged-food multiples. The analyst average target of $20.79 implies ~4.6% upside, and the high target of $41.5 suggests substantial optionality if margins recover.
- Strong free cash flow supports turnaround: Despite a Q4 net loss of $60 million, CPB generated $678 million in trailing free cash flow, equal to ~10% of its $6.67 billion market cap. This cash generation funds cost-cutting initiatives and debt service even as reported earnings are depressed.
- Cost cuts and margin repair underway: Management's Q4 earnings call focused on cost cuts and margin repair, and gross margin, while down to 27.3% in Q4 from 30.4% a year earlier, remains above 27%. Sequential stabilization in gross margin from Q4's 27.3% versus Q3's 27.5% suggests the worst of the input-cost pressure may be passing.
- Dividend yield remains attractive: Even after the cut, CPB yields 7.05%, far above the market and sector averages. With a payout ratio of 116.6% of trailing EPS but only ~57% of estimated forward EPS of $2.01, the dividend appears more sustainable on a forward basis, offering income support.
Bearish
- Fundamental deterioration and Q4 miss: Fiscal Q4 revenue fell 7.9% year-over-year to $2.14 billion, and the company swung to a net loss of $60 million (EPS -$0.22) from a $145 million profit a year earlier. This sharp deterioration, combined with weak guidance, has reframed CPB as a turnaround story rather than a stable income stock.
- Dividend cut signals distress: The dividend cut, alongside a payout ratio of 116.6% of trailing EPS, indicates the prior dividend was unsustainable. The market now treats the 7.05% yield as a distress signal, and further negative revisions could pressure the stock.
- Leverage and liquidity concerns: Debt-to-equity stands at 1.85x, and the current ratio of 0.82 is below 1.0, indicating potential liquidity strain. Interest expense of $77 million in Q4 alone consumes a significant portion of operating income ($4 million), leaving little room for error.
- S&P 500 removal and relative weakness: CPB was removed from the S&P 500, triggering index-fund selling, and its relative strength versus the S&P 500 is -50.8% over one year and -40.2% YTD. The stock is down 35.3% over the past year and 28.3% YTD, massively underperforming the market.
CPB Technical Analysis
Beta
0.04
0.04x market volatility
Max Drawdown
-44.0%
Largest decline past year
52-Week Range
$19-$32
Price range past year
Annual Return
-33.2%
Cumulative gain past year
| Period | CPB Return | S&P 500 |
|---|---|---|
| 1m | +1.9% | -1.0% |
| 3m | -5.1% | +2.9% |
| 6m | +0.5% | +6.5% |
| 1y | -33.2% | +13.1% |
| ytd | -25.2% | +11.4% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
CPB Fundamental Analysis
Quarterly Revenue
$2.1B
2026-08
Revenue YoY Growth
-7.9%
YoY Comparison
Gross Margin
27.3%
Latest Quarter
Free Cash Flow
$678000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is CPB Overvalued?
PE
16.7x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 12x~25x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
10.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are elevated. CPB's debt-to-equity of 1.85x and current ratio of 0.82 indicate a leveraged balance sheet with limited short-term liquidity. The Q4 net loss of $60 million and operating income of just $4 million, against $77 million in interest expense, show that operating earnings barely cover interest costs. Revenue concentration in the US (~90%) and in mature categories like soups and snacks exposes the company to volume erosion if consumer preferences shift or private-label competition intensifies. The 7.9% revenue decline in Q4, following a 3.5% decline in Q3, signals accelerating top-line weakness that could pressure margins further. Market and competitive risks include valuation compression if the turnaround fails. While the forward PE of 10.8x is low, it reflects skepticism; if earnings estimates are cut further, the stock could de-rate. The beta of 0.044 suggests low market correlation, but sector rotation away from defensives and the S&P 500 removal have already driven significant underperformance (-35.3% over one year). Competitive threats from General Mills, Kraft Heinz, and Conagra, as well as private-label brands, could limit pricing power. The recent Zacks 'Bear of the Day' and dividend cut highlight negative sentiment, which may persist until tangible progress is shown. The worst-case scenario involves a continued revenue decline, margin compression, and a liquidity crunch. If CPB fails to stabilize volumes and margins, the stock could retest its 52-week low of $18.60, representing a 6.4% decline from the current $19.87. A more severe scenario, such as a dividend suspension or covenant breach, could push the stock toward the analyst low target of $16.00, a 19.5% downside. The maximum drawdown over the past period was -44.02%, illustrating the potential for significant losses if the turnaround derails.
FAQ
The key risks are financial, competitive, and company-specific. Financially, CPB has a debt-to-equity of 1.85x and a current ratio of 0.82, indicating leverage and liquidity concerns. The dividend payout ratio of 116.6% of trailing EPS is unsustainable without a recovery. Competitively, CPB faces pressure from private-label brands and peers like General Mills and Kraft Heinz, which could limit pricing power and volume growth. Company-specific risks include the ongoing turnaround execution, with revenue down 7.9% in Q4 and a net loss. Additionally, the stock's removal from the S&P 500 has triggered index selling, and short interest is elevated at a short ratio of 3.95. The most severe risk is a liquidity crunch or covenant breach, which could lead to a dividend suspension and a sharp stock decline.
Our 12-month forecast has three scenarios. The base case (55% probability) targets $19-$22, assuming revenue declines moderate and margins stabilize, with the stock trading around the analyst average target of $20.79. The bull case (20% probability) targets $24-$28, driven by successful cost cuts, margin recovery above 28%, and improved sentiment. The bear case (25% probability) targets $16-$18.60, reflecting a failed turnaround, accelerating revenue declines, and potential liquidity issues. The most likely scenario is the base case, with the key assumption that gross margins hold around 27-28% and free cash flow remains sufficient to cover the dividend and debt service.
CPB appears undervalued on most metrics. Its forward PE of 10.8x is well below the market average, and its price-to-sales ratio of 0.68x is low for a branded food company. The EV/EBITDA of 10.5x is also modest. However, the trailing PE of 16.7x is distorted by the recent earnings decline, and the PEG ratio is negative due to negative growth expectations. Compared to its own history, CPB is trading at a discount, but the discount reflects real fundamental deterioration. The market is pricing in skepticism about the turnaround, implying that investors expect earnings to remain depressed or decline further. If the company can stabilize margins and return to growth, the valuation could re-rate higher.
CPB is a high-risk, high-reward value play. The stock trades at 10.8x forward earnings and 0.68x sales, with a 7.05% dividend yield, which is attractive for income and value investors. However, the company just reported a Q4 revenue decline of 7.9% and a net loss, cut its dividend, and was removed from the S&P 500. The analyst average target of $20.79 implies only 4.6% upside, and the consensus is 'hold'. The biggest downside risk is a retest of the 52-week low of $18.60, or worse, the analyst low target of $16.00. For patient investors with a long horizon and tolerance for volatility, CPB could be a contrarian buy, but it is not suitable for those seeking stability or growth.
CPB is more suitable for long-term, value-oriented investors than short-term traders. The stock has a low beta of 0.044, indicating low volatility relative to the market, but it has been in a downtrend with a 35.3% decline over the past year. The turnaround story will take multiple quarters to play out, and near-term earnings visibility is low. The dividend, while cut, still offers a 7.05% yield, which is attractive for income-focused long-term investors. Short-term traders might find opportunities around earnings announcements, but the risk of further negative news is high. A suggested minimum holding period is 2-3 years to allow for the turnaround to materialize.