Based on Campbell Soup Company's (NYSE:CPB) earnings update on 28 July 2019, analyst consensus outlook appear vastly optimistic, with earnings expected to grow by a high double-digit of 65% in the upcoming year, compared with the previous 5-year average growth rate of -14%. Currently with trailing-twelve-month earnings of US$474m, we can expect this to reach US$781m by 2020. Below is a brief commentary on the longer term outlook the market has for Campbell Soup. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Can we expect Campbell Soup to keep growing?
The view from 9 analysts over the next three years 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 reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2022, CPB's earnings should reach US$609m, from current levels of US$474m, resulting in an annual growth rate of 9.1%. EPS reaches $2.02 in the final year of forecast compared to the current $1.57 EPS today. Margins are currently sitting at 5.8%, which is expected to expand to 7.3% by 2022.
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 look at:
- 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.
- 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.
- 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!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.