Stock of the day: Campbell Soup Company (NYSE:CPB)
The soup seller has had a pretty sour 2017. Though it managed to climb 6 and a half month peak of $64 in early February, this was to be a brief and short-lived high for Campbell. Its mid-February second quarter update was a bit of a nightmare, sparking a 6.5% fall as the company revealed that revenue had dropped 1.4% to $2.17 billion, leading to a huge 61% plunge in earnings to 33 cents per share (though excluding impairment charges earnings rose from 87 cents to 91 cents).
That’s because the Campbell had major issues in its fresh food division, where sales slid 8% to $260 million. It was forced to recall some Bolthouse Farms drinks, while in a bizarre decision the company paid the price for harvesting carrots before they were fully grown.
A downgrade from Bernstein lopped off another 3.5% towards the end of March – ironically because analysts highlighted a consumer shift towards fresher produce – leaving the stock to trade between $57 and $58 for much of spring. This all led to Campbell’s third quarter statement in mid-May, which produced a rather odd reaction from investors.
Initially the stock fell 2%, after Campbell announced it now expects its full year sales to remain flat, or drop as much as 1% (compared to the previously stated 1% growth target). However, as investors digested the fact that the company had revised its annual adjusted profit forecasts higher – from $3.00 to $3.09 to $3.04 to $3.09 – the stock began to recover, actually climbing to its best price in 2 months just a week later.
Since then, however, Campbell Soup has struggled. The stock rapidly shed value across June and the first half of July, eventually hitting an 18-month low of $50.63. It had clawed back some of those losses, though has tanked in the last few days, now sitting at a current trading price of $.
In terms of Thursday’s fourth quarter figures, analysts are expecting Campbell Soup to post revenue of $1.69 billion – unchanged from Q4 2016 – but with a near 20% rise in earnings to 55 cents per share. As for the full year, revenue is forecast to nudge half a percent lower to $7.92 billion, while earnings should jump 3.7% to $3.05 per share.
Campbell Soup Co has a consensus rating of ‘Hold’ alongside an average price target of $56.76.
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