- Price
- $20.38
- Fair value
- $41.50
- Discount
- 50.9%
- Uncertainty
- Medium
- LSEG rating
- 3.38
- Moat
- Wide
- Next earnings
- 2026-12-03
- Next earnings is estimate
- Yes
- Company name
- The Campbell's Company
- Sector
- Packaged foods
- About
- The Campbell's Company, renamed from Campbell Soup Company in November 2024, sells packaged food across two segments. Meals & Beverages, about 61% of fiscal 2026 sales, includes Campbell's condensed and ready-to-serve soups, Prego pasta sauce, Pace, V8, Swanson broth, Pacific Foods, and Rao's premium Italian sauces, added through the 2024 purchase of Sovos Brands. Snacks, the rest of sales, includes Pepperidge Farm (Goldfish crackers, Milano cookies), Snyder's of Hanover pretzels, Cape Cod chips, Kettle Brand, Lance, and Late July, most of it added through the 2018 purchase of Snyder's-Lance. Almost all sales are in the United States, with a smaller international business selling mostly in Canada, Latin America, and Asia. In May 2026, Campbell's paid $286 million for a 49% stake in La Regina, the Italian company that makes all of Rao's tomato-based sauces, tying its supply chain more closely to its fastest-growing premium brand. The company earns its moat from decades-old brand recognition and shelf space at large grocery chains, which makes it hard for a new entrant to displace it.
- Thesis
- At $20.38, CPB trades about 51% below the analysts' $41.50 fair value estimate. The market is worried about a real, ongoing decline: fiscal 2026 net sales fell 5% and adjusted earnings per share fell 27% to $2.17, and management's own fiscal 2027 guidance calls for another drop, with adjusted earnings per share of $1.65-$1.80. To fund a turnaround, the board cut the quarterly dividend 36%, to $0.25 per share, and Campbell's cut about 550 jobs and closed two snack plants as part of a new plan to save $500 million by fiscal 2030. Two rating agencies downgraded Campbell's debt within the past year on the higher leverage, and both keep a negative outlook. The case for the discount closing rests on that turnaround plan working: cost savings flow through, Rao's and Goldfish keep growing, and the snacks business stabilizes once the new plant footprint and lower headcount are in place, letting margins recover from fiscal 2028 as management has signaled. Campbell's brands and retailer relationships are the kind of moat that has let the company survive weak stretches before. The honest counter-case: leverage is still elevated, at roughly 4.9 times adjusted earnings by Moody's measure, GLP-1 drugs and private-label competition are structural pressures on both soup and snacks, and a turnaround that management itself now expects to take until fiscal 2028 could easily slip further, leaving the stock cheap for longer or forcing another dividend cut.
- Risks
- Leverage remains elevated even after the dividend cut. Moody's put adjusted leverage at about 4.9 times at fiscal year-end 2026, and both Moody's (to Baa3) and Fitch (to BBB-) downgraded Campbell's within the past year, each keeping a negative outlook. Less room to absorb a setback than a less-levered company.
The Snacks segment (Pepperidge Farm, Snyder's-Lance brands) is the weak spot: organic sales fell 4% and segment operating earnings fell 28% in fiscal 2026. Closing two plants and cutting 13% of salaried staff is a real bet that this turnaround works; it is not yet proven out.
Management's own fiscal 2027 guidance calls for a second straight year of decline: net sales down 2%-4% and adjusted earnings per share down 17%-24% to $1.65-$1.80. The turnaround is not expected to show up in results until fiscal 2028.
The 36% dividend cut signals real cash-flow strain, not just caution. It may push income-focused shareholders to sell, and there is less cushion if the company needs to cut the payout again.
GLP-1 weight-loss drugs, tariffs (about 4% of fiscal 2026 cost of goods sold), and commodity and logistics inflation projected at 5%-6% and double digits, respectively, for fiscal 2027 all pressure volumes and margins at the same time.
The turnaround depends on a still-new leadership team: CEO Mick Beekhuizen has led the company since February 2025, and CFO Todd Cunfer joined in October 2025. It also leans on the $286 million bet that La Regina keeps Rao's, its fastest-growing brand, supplied and growing.
Private-label competition and a longer-term shift toward fresh and "better-for-you" foods could permanently shrink demand for legacy soup and snack brands, independent of any near-term turnaround.
- Recent events
- 2026-09-23: Moody's downgraded Campbell's long-term rating to Baa3 from Baa2, citing weak fiscal 2026 earnings, expected further declines in fiscal 2027, and adjusted leverage of about 4.9 times at fiscal year-end. The outlook stays negative.
2026-09-03: Campbell's reported fourth-quarter and full-year fiscal 2026 results. Q4 net sales fell 8% to $2.1 billion (down 1% organically). Full-year net sales fell 5% to $9.7 billion, and adjusted earnings per share fell 27% to $2.17.
2026-09-03: Management guided fiscal 2027 net sales down 2%-4% and adjusted earnings per share down 17%-24%, to $1.65-$1.80. The board cut the quarterly dividend 36%, to $0.25 per share ($1.00 annualized), to speed up debt paydown.
2026-09-03: Campbell's launched a new cost-savings program targeting $500 million by fiscal 2030, cut roughly 550 jobs (about 13% of its salaried workforce), and closed two snack plants.
2026-05-04: Campbell's completed its $286 million purchase of a 49% stake in La Regina, the Italian producer that makes all of Rao's Homemade tomato-based sauces.
2025-12-10: Fitch downgraded Campbell's long-term rating to BBB- from BBB, citing leverage expected to stay above 3.5 times for an extended period.
2025-10-20: Todd Cunfer, previously Chief Financial Officer of Freshpet, became Campbell's CFO, succeeding Carrie Anderson.