Campbell Soup (CPB): Reassessing Valuation After Weak Q1 Results and Lower Analyst Price Targets

Campbell's (CPB) just delivered a tough first quarter, with lower sales and adjusted earnings rattling an already weak stock, and the swift wave of reduced analyst expectations has only sharpened investor focus on margins.

See our latest analysis for Campbell's.

At a share price of $28.74, Campbell's has seen its 30 day share price return fall 8.15% and its 1 year total shareholder return slump 30.15%, signaling fading momentum despite steady guidance and bond issuance to strengthen its balance sheet.

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With shares near multi year lows, a double digit discount to average analyst targets, a fat dividend, and real balance sheet stress, is Campbell's now a contrarian value play, or is the market correctly pricing muted growth ahead?

Most Popular Narrative: 15.1% Undervalued

With Campbell's most followed narrative implying a fair value above the recent $28.74 close, the valuation gap now hinges on how earnings and margins evolve.

Ongoing execution of expanded cost savings initiatives and supply chain optimization including the newly raised $375 million target should progressively improve operational efficiency, bolster net margins, and generate incremental earnings growth over the next several years.

Read the complete narrative.

What if a mature pantry brand quietly delivered rising profits without needing big sales growth? The narrative leans on margin upgrades, disciplined discounting, and a surprisingly punchy future earnings multiple. Curious how those moving parts add up to its fair value call?

Result: Fair Value of $33.84 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent volume declines in key categories, along with mounting input cost pressures from tariffs, could quickly erode the margin and earnings upside this thesis depends on.

Find out about the key risks to this Campbell's narrative.

Another Take on Valuation

While the leading narrative points to a $33.84 fair value and modest undervaluation, the market is sending a mixed signal. Campbell's trades on a 14.8x price to earnings ratio, slightly richer than its peers at 14x yet below its own fair ratio of 19.7x, suggesting both downside risk and catch up potential.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Campbell's Narrative

If you are not fully convinced by this view, or simply prefer running your own numbers and assumptions, you can build a custom narrative in just a few minutes, starting with Do it your way.

A great starting point for your Campbell's research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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