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Campbell Soup Company (CPB)
:CPB
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Campbell Soup
(NASDAQ:CPB)70Outperform
Positive Factors
Acquisitions
The EPS beat in the quarter was primarily driven by a stronger contribution from the Sovos acquisition.
Negative Factors
Financial Performance
First quarter financial performance was softer than expected, and there is a need for improvement in the second quarter to meet fiscal year targets.
Management Changes
The announcement of CEO Clouse leaving the company for the NFL was accompanied by uncertainty regarding future guidance for fiscal year 2025 and 2026.
Campbell Soup (CPB) vs. S&P 500 (SPY)
Market Cap
$12.02B
Dividend Yield3.63%
Average Volume (3M)3.12M
Price to Earnings (P/E)22.0
Beta (1Y)0.12
Revenue Growth6.34%
EPS Growth-30.58%
CountryUS
Employees14,400
SectorConsumer Defensive
Sector Strength73
IndustryConsumer Products - Foods
Share Statistics
EPS (TTM)1.84
Shares Outstanding298,109,250
10 Day Avg. Volume3,542,838
30 Day Avg. Volume3,123,739
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.31
Price to Cash Flow (P/CF)13.70
P/FCF Ratio20.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$46.13Price Target Upside14.38% Upside
Rating ConsensusHold
Number of Analyst Covering8
Campbell Soup Business Overview & Revenue Model
Company DescriptionCampbell Soup Co. operates two segments. Meals & Beverages includes the retail and foodservice businesses in the U.S. and Canada. The segment includes the following products: Campbell’s condensed and ready-to-serve soups; Swanson broth and stocks; Pacific Foods broth, soups and non-dairy beverages; Prego pasta sauces; Pace Mexican sauces; Campbell’s gravies, pasta, beans and dinner sauces; Swanson canned poultry; Plum baby food and snacks; V8 juices and beverages; and, Campbell’s tomato juice.
Snacks includes Pepperidge Farm cookies, crackers, fresh bakery and frozen products in U.S. retail, including Milano cookies and Goldfish crackers, as well as Snyder’s of Hanover pretzels, Lance sandwich crackers, Cape Cod and Kettle Brand potato chips, Late July snacks, Snack Factory Pretzel Crisps, Pop Secret popcorn, Emerald nuts, and other snacking products in the U.S. and Canada. Beginning in fiscal 2020, the segment also includes the retail business in Latin America.
The company was founded on November 23, 1922 and is headquartered in Camden, NJ. Campbell was founded in 1869.
How the Company Makes MoneyCampbell Soup Company generates revenue primarily through the sale of its branded food products across various retail channels, including supermarkets, mass merchandisers, and convenience stores. The Meals & Beverages segment contributes significantly to its revenue through the sale of canned soups, broths, and sauces. Meanwhile, the Snacks segment drives revenue through a broad portfolio of snack brands like Pepperidge Farm, Snyder's of Hanover, and Goldfish. In addition to traditional retail sales, Campbell's also leverages e-commerce platforms and partnerships with foodservice providers to reach consumers. The company's earnings are bolstered by its strong brand recognition, strategic product innovation, and efficient supply chain management.
Campbell Soup Financial Statement Overview
Summary
Campbell Soup demonstrates solid revenue growth and efficient cash flow management, reflected in strong cash metrics. However, high leverage and moderate profitability margins point to potential financial risks. The company maintains a stable financial position with room for improvement in debt management.Income Statement
The income statement shows steady revenue growth with a 3.05% increase in revenue from 2023 to 2024 TTM. Gross Profit Margin is healthy at 30.36%, and Net Profit Margin at 5.57% indicates moderate profitability. EBIT Margin is strong at 10.83%. While EBITDA Margin is robust at 13.43%, the decline in net income compared to previous periods suggests some pressure on profitability.78
Positive
Balance Sheet
The balance sheet reflects a high Debt-to-Equity Ratio of 2.06, indicating significant leverage, which could pose financial risk. Return on Equity (ROE) is moderate at 14.34%, showing decent profitability relative to equity. The Equity Ratio is low at 23.84%, suggesting reliance on debt financing.70
Positive
Cash Flow
Cash flow analysis reveals a strong Operating Cash Flow to Net Income Ratio of 2.24, indicating efficient cash conversion. Free Cash Flow has grown by 28.98% from the previous year, showing improved cash availability. The Free Cash Flow to Net Income Ratio is favorable at 1.56, highlighting good cash profitability.82
Very Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 9.89B | 9.64B | 9.36B | 8.56B | 8.48B | 8.69B | Gross Profit |
| 3.00B | 2.97B | 2.92B | 2.63B | 2.81B | 3.00B | EBIT |
| 1.07B | 1.46B | 1.31B | 1.19B | 1.33B | 1.35B | EBITDA |
| 1.33B | 1.42B | 1.70B | 1.53B | 1.93B | 1.62B | Net Income Common Stockholders |
| 551.00M | 567.00M | 858.00M | 757.00M | 1.00B | 592.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 108.00M | 108.00M | 189.00M | 109.00M | 69.00M | 859.00M | Total Assets |
| 15.23B | 15.23B | 12.06B | 11.89B | 11.73B | 12.37B | Total Debt |
| 7.54B | 7.54B | 4.50B | 4.87B | 5.01B | 4.99B | Net Debt |
| 7.43B | 7.43B | 4.31B | 4.76B | 4.94B | 4.13B | Total Liabilities |
| 11.44B | 11.44B | 8.39B | 8.56B | 8.58B | 9.80B | Stockholders Equity |
| 3.79B | 3.79B | 3.66B | 3.33B | 3.15B | 2.57B |
| Cash Flow | Free Cash Flow | ||||
| 862.00M | 668.00M | 773.00M | 939.00M | 760.00M | 1.10B | Operating Cash Flow |
| 1.24B | 1.19B | 1.14B | 1.18B | 1.03B | 1.40B | Investing Cash Flow |
| -3.04B | -3.13B | -340.00M | -230.00M | -158.00M | 2.27B | Financing Cash Flow |
| 2.52B | 1.86B | -723.00M | -910.00M | -1.67B | -2.99B |
Campbell Soup Technical Analysis
Positive
40.33
Price Trends
39.56
Positive
42.36
Negative
44.40
Negative
Market Momentum
0.38
Negative
54.30
Neutral
57.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CPB, the sentiment is Positive. The current price of 40.33 is above the 20-day moving average (MA) of 39.08, above the 50-day MA of 39.56, and below the 200-day MA of 44.40, indicating a neutral trend. The MACD of 0.38 indicates Negative momentum. The RSI at 54.30 is Neutral, neither overbought nor oversold. The STOCH value of 57.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CPB.
Campbell Soup Risk Analysis
Campbell Soup disclosed 21 risk factors in its most recent earnings report. Campbell Soup reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Campbell Soup Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $35.70B | 16.16 | 47.11% | 3.07% | 0.33% | 20.17% | |
73 Outperform | $28.43B | 21.22 | 38.65% | 2.73% | -16.16% | 41.01% | |
72 Outperform | $33.70B | 13.30 | 28.29% | 3.85% | -1.48% | 11.45% | |
70 Outperform | $12.02B | 21.96 | 14.94% | 3.63% | 6.34% | -30.58% | |
68 Neutral | $37.43B | 13.87 | 5.58% | 5.11% | -2.98% | -2.22% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% | |
61 Neutral | $11.76B | 22.22 | -3.72% | 3.89% | 7.07% | -181.54% |
* Consumer Defensive Sector Average
Performance Comparison
CPB
Campbell Soup
40.33
-1.20
-2.89%
GIS
General Mills
61.14
-1.03
-1.66%
HSY
The Hershey Company
176.38
-5.58
-3.07%
SJM
JM Smucker
109.84
-6.59
-5.66%
K
Kellanova
82.36
30.54
58.93%
KHC
Kraft Heinz
30.98
-2.54
-7.58%
Campbell Soup Earnings Call Summary
Earnings Call Date: Dec 3, 2024 | % Change Since: -10.60% | Next Earnings Date: Mar 5, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced outlook. While Campbell's reported strong net sales growth driven by Sovos integration and maintained confidence in its leadership brands, challenges such as organic net sales decline and increased interest expenses were noted. The company's reaffirmation of its fiscal '25 guidance and dividend increase indicate a positive long-term outlook, but current headwinds temper the overall sentiment.Highlights
Strong Start to Fiscal '25
Campbell's began fiscal '25 with net sales up 10%, reflecting momentum from Sovos addition. Organic net sales were down 1% but in line with expectations.
Leadership Brands Performance
16 leadership brands showed growth in both dollar consumption and share in the quarter, with a 2% increase in in-market dollar consumption when including Sovos.
Sovos Brands Integration
The integration of Sovos Brands is progressing well, with Rao's brand showing a robust 15% growth in-market consumption.
Improved Consumer Confidence
The overall food sector is seeing favorable trends, with improving consumer confidence and stabilization in food volumes as prices normalize.
Dividend Increase
Campbell's announced a 5% increase in its regular quarterly dividend, reflecting confidence in earnings and cash flow.
Lowlights
Organic Net Sales Decline
Campbell's reported a 1% decline in organic net sales, driven by a dynamic consumer environment and retailer inventory movements.
Snacks Segment Challenges
The snacks segment faced a 2% decline in organic net sales due to competitive pressures and a decrease in partner and contract brands.
Interest Expense Impact
Higher interest expenses due to increased debt levels led to a 2% decrease in adjusted EPS.
Gross Profit Margin Decline
Adjusted gross profit margin declined 70 basis points, primarily driven by the impact of the Sovos acquisition.
Company Guidance
In the Campbell's Company Q1 Fiscal 2025 earnings call, the company reaffirmed its full-year guidance, projecting steady progress throughout the fiscal year. For the first quarter, Campbell's reported a 10% increase in net sales, largely driven by the acquisition of Sovos Brands, while organic net sales decreased by 1% due to dynamic consumer environments and inventory adjustments related to the timing of Thanksgiving. Adjusted EBIT grew by 6%, although adjusted EPS decreased by 2% to $0.89 due to higher interest expenses from increased debt levels. The company highlighted the strong performance of its 16 leadership brands, particularly noting a 15% consumption growth for Rao's in the Italian sauce category. Campbell's anticipates sequential top-line growth and market share momentum in Q2, supported by a holiday season strategy, and expects the Sovos acquisition to be accretive to adjusted EPS in fiscal 2025. The company's leverage ratio stood at 3.7x, with plans to return to a 3x net leverage target by fiscal 2027.Campbell Soup Corporate Events
M&A Transactions
Campbell Soup Completes Sale of Noosa Yoghurt
Neutral
Feb 24, 2025
On February 24, 2025, Campbell’s Company announced the completion of the sale of its noosa yoghurt business to Lakeview Farms, LLC. This divestiture, which follows the acquisition of noosa as part of Sovos Brands in March 2024, is expected to slightly reduce earnings per share in fiscal 2025 by approximately $0.01.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.