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Credit Suisse Raises Campbell Soup’s Price Target to $60 per Share

Gabriel Kane

Friday’s Consumer Pops and Drops: FL, CLX, PEP, HLF, and WHR

(Continued from Prior Part)

Price movement of Campbell Soup

Campbell Soup (CPB) has a market cap of $19.2 billion. CPB fell by 1.0% to close at $61.98 per share as of February 26, 2016. The price movement on a weekly, monthly, and year-to-date (or YTD) basis is 1.7%, 12.7%, and 18.7%, respectively.

Currently, CPB is trading 6.3% above its 20-day moving average, 12.4% above its 50-day moving average, and 23.3% above its 200-day moving average.

The iShares Russell Midcap ETF (IWR) invests 0.14% of its holdings in Campbell Soup. The ETF tracks a market-cap-weighted index of the 800 smallest companies in the Russell 1000. The YTD price movement of IWR was -6.3% as of February 25, 2016.

The market caps of Campbell Soup’s competitors are as follows:

  • Mondelez International (MDLZ): $63.8 billion
  • General Mills (GIS): $35.0 billion
  • TreeHouse Foods (THS): $4.8 billion

Credit Suisse raised Campbell Soup’s price target

Credit Suisse raised the price target of Campbell Soup to $60 from $57 per share after the rise in net income in fiscal 2Q16. Credit Suisse maintained its “underperform” rating for the company.

Performance of Campbell Soup in fiscal 2Q16

Campbell Soup (CPB) reported fiscal 2Q16 net sales of $2,201.0 million, a fall of 1.5% compared to net sales of $2,234.0 million in fiscal 2Q15. The company’s cost of products sold as a percentage of net sales fell by 6.0%, and its EBIT (earnings before interest and tax) rose by 22.8% in fiscal 2Q16 compared to fiscal 2Q15.

The company’s net income and EPS (earnings per share) rose to $265.0 million and $0.85, respectively, in fiscal 2Q16 compared to $222.0 million and $0.71, respectively, in fiscal 2Q15.

Meanwhile, its cash and cash equivalents rose by 52.2% in fiscal 2Q16 compared to fiscal 2Q15. Its current ratio rose to 0.83x and its debt-to-equity ratio fell to 2.5x in fiscal 2Q16 compared to a current ratio and a debt-to-equity ratio of 0.73x and 2.6x, respectively, in fiscal 2Q15.

The PE (price-to-earnings) and PS (price-to-sales) ratios of Campbell Soup are 27.3x and 2.4x, respectively, as of February 26, 2016.


The company has made the following projections for fiscal 2016:

  • net sales growth in the range of -1% to 0%
  • adjusted EBIT growth in the range of 10% to 13%
  • adjusted EPS growth in the range of 9% to 12% or $2.88 to $2.96

Continue to the next part for a look at Herbalife.

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