How Do Analysts See Campbell Soup Company (NYSE:CPB) Performing In The Next 12 Months?

In April 2018, Campbell Soup Company (NYSE:CPB) announced its earnings update. Overall, analysts seem fairly confident, with earnings expected to grow by 34.7% in the upcoming year relative to the past 5-year average growth rate of -0.6%. Presently, with latest-twelve-month earnings at US$485.0m, we should see this growing to US$653.2m by 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Campbell Soup in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

View our latest analysis for Campbell Soup

What can we expect from Campbell Soup in the longer term?

Longer term expectations from the 15 analysts covering CPB’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of CPB’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
NYSE:CPB Future Profit August 30th 18
NYSE:CPB Future Profit August 30th 18
This results in an annual growth rate of 34.1% based on the most recent earnings level of US$887.0m to the final forecast of US$1.62b by 2021. EPS reaches $2.94 in the final year of forecast compared to the current $2.91 EPS today. The bottom-line growth seems to be caused by reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. Margins is currently sitting at 11.2%, which is expected to expand to 15.8% by 2021.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Campbell Soup, I’ve put together three fundamental aspects you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Campbell Soup worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Campbell Soup is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Campbell Soup? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.