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Goldman Sachs Upgrades Campbell Soup to ‘Neutral’

Gabriel Kane

Yesterday’s Consumer Pops and Drops: LKQ, CPB, LNCE, VGR, and ATR

(Continued from Prior Part)

Price movement of Campbell Soup

Campbell Soup (CPB) has a market cap of $19.1 billion. CPB fell by 0.37% to close at $61.75 per share on February 29, 2016. Its price movements on weekly, monthly, and YTD (year-to-date) bases are 1.7%, 10.8%, and 18.2%, respectively.

Currently, CPB is trading 5.3% above its 20-day moving average, 11.7% above its 50-day moving average, and 22.6% 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 -4.9% as of February 26, 2016.

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

  • Mondelēz International (MDLZ) – $63.6 billion
  • General Mills (GIS) – $34.9 billion
  • TreeHouse Foods (THS) – $4.8 billion

Goldman Sachs upgrades Campbell Soup

Goldman Sachs has upgraded Campbell Soup’s rating from “sell” to “neutral.” It also rose the price target to $62 from $50 per share.

Performance of Campbell Soup in fiscal 2Q16

Campbell Soup (CPB) reported fiscal 2Q16 net sales of $2.20 billion, a fall of 1.5% from the net sales of $2.23 billion 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 from 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 with $222.0 million and $0.71, respectively, in fiscal 2Q15.

Meanwhile, its cash and cash equivalents rose by 52.2% in fiscal 2Q16 from fiscal 2Q15. Its current ratio rose to 0.83x and its debt-to-equity ratio fell to 2.5x in fiscal 2Q16, compared with 0.73x and 2.6x, respectively, in fiscal 2Q15. The PE (price-to-earnings) and PS (price-to-sales) ratios of Campbell Soup were 27.2x and 2.4x, respectively, as of February 29, 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 of this series for a look at Snyder’s-Lance.

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