Should Value Investors Buy Campbell Soup (CPB) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Campbell Soup (CPB). CPB is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 17.12. This compares to its industry's average Forward P/E of 19.08. CPB's Forward P/E has been as high as 20.32 and as low as 15.06, with a median of 18.23, all within the past year.
Investors will also notice that CPB has a PEG ratio of 2.13. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CPB's industry currently sports an average PEG of 2.60. Over the past 52 weeks, CPB's PEG has been as high as 3.53 and as low as 2.13, with a median of 3.09.
These are only a few of the key metrics included in Campbell Soup's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CPB looks like an impressive value stock at the moment.
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