Last Update 17 Mar 26

Fair value Decreased 18%

CPB: Snacks Turnaround And Stable Meals Segment Will Support Rebound

The analyst price target for Campbell's has been reduced by around $5 to align with a series of lower Street targets, as analysts highlight weaker Q2 results, softer Snacks performance, tighter cash management, higher leverage, and reduced earnings visibility.

Analyst Commentary

Recent research updates on Campbell's show a clear reset in expectations following the fiscal Q2 report and the company's revised FY26 outlook. Targets have generally moved lower, and views are split between those who see a challenging but manageable earnings profile and those who are more focused on balance sheet pressure and Snacks underperformance.

Bullish Takeaways

Some bullish analysts maintain more constructive ratings even after lowering targets, pointing to flat overall consumption in the latest quarter as a sign that core demand has been relatively stable despite operational issues.
Comments around Meals & Beverages being stronger than Snacks suggest that not all parts of the portfolio are under pressure, which could support earnings if management can sustain that segment's performance.
A few firms keep ratings such as In Line, Sector Perform, Equal Weight or Outperform, indicating that, at their revised targets, they see current valuation as more in line with updated earnings models rather than severely mispriced.
Where analysts expect results to be broadly in line with estimates, they indicate that some of the weaker retail volume trends and competitive pressures may already be reflected in current share pricing.

Bearish Takeaways

Bearish analysts emphasize ongoing Snacks underperformance, fresh baked challenges and softer top line trends, which reduce confidence in the company's ability to deliver on its prior FY26 outlook and support higher valuation multiples.
Higher leverage, tighter cash management, a suspended share repurchase program and a frozen dividend are seen as signs of financial flexibility being constrained, which raises concerns about funding investment and competing effectively.
Several research notes flag limited earnings visibility, with margin softness, mounting pricing pressure from competition and a slower than expected Snacks recovery all contributing to more cautious earnings models.
Some analysts who moved to more bearish stances cite a convergence of earnings risk, elevated leverage and tight dividends as reasons to expect share performance to lag peers, particularly if negative profit catalysts materialize.

What's in the News

Target plans to require all cereals it sells to be made without certified synthetic colors by the end of May. This shift affects large packaged food suppliers, including Campbell's, alongside peers such as General Mills, Kraft Heinz, Conagra, PepsiCo and Coca-Cola (Axios).
Campbell's reported that, from November 3, 2025 to February 1, 2026, it repurchased 0 shares for US$0 under the buyback announced on September 1, 2021. That program completed repurchases of 4,176,095 shares, or 1.39%, for US$198.09m.
Over the same period, the company repurchased 56,667 shares for US$1.59m under the buyback announced on December 3, 2024, bringing cumulative repurchases under that authorization to 2,107,806 shares, or 0.71%, for US$88.39m.

Valuation Changes

Fair Value: revised down from $31.56 to $25.94, a reduction of about 18% in the modelled estimate.
Discount Rate: moved slightly higher from 7.07% to 7.33%, implying a modestly higher required return in the updated assumptions.
Revenue Growth: updated from 0.58% to 0.76%, a small uplift in the projected top line growth rate.
Net Profit Margin: adjusted from 8.79% to 9.06%, reflecting a slightly higher margin assumption.
Future P/E: brought down from 12.67x to 10.27x, indicating a lower valuation multiple applied in the refreshed model.

3 views

Key Takeaways

Shifting consumer trends toward convenience, health, and at-home cooking support demand for Campbell's core products, premium offerings, and higher-margin innovations.
Expanded cost-saving measures, supply chain resilience, and strong brand investments strengthen margins, operational efficiency, and revenue growth amid industry challenges.
Reliance on traditional processed foods, cost pressures, and slow innovation threaten Campbell's profitability, market share, and long-term growth amid shifting consumer preferences and increased competition.

Catalysts

About Campbell's

Manufactures and markets food and beverage products in the United States and internationally.What are the underlying business or industry changes driving this perspective?

The sustained trend of consumers valuing convenience and stocking pantries, combined with a persistent preference for at-home cooking, is expected to drive stable or growing demand for Campbell's shelf-stable core categories (soups, broths, sauces), supporting resilient revenue streams and reducing downside risk in sales.
Product innovation aligned with health and wellness, such as the removal of FD&C colors, launches of avocado oil Kettle Chips and Pacific bone broths, and premium options like Milano White Chocolate cookies, positions Campbell's to capture premium pricing and higher margins, as well as expand share with health-oriented and younger consumers.
Ongoing execution of expanded cost savings initiatives and supply chain optimization-including the newly raised $375 million target-should progressively improve operational efficiency, bolster net margins, and generate incremental earnings growth over the next several years.
Enhanced marketing investment and focused support for high-potential brands (notably Rao's and Goldfish) are expected to drive brand awareness, household penetration, and buy rates, fueling revenue growth above low industry averages and countering volume headwinds.
Campbell's broad domestic production footprint and inventory management capabilities provide strategic insulation against supply chain shocks and regulatory disruptions, supporting margin stability and reducing execution risk as supply chain resilience becomes increasingly vital in the packaged food sector.

Campbell's Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Campbell's's revenue will decrease by 0.0% annually over the next 3 years.
Analysts assume that profit margins will increase from 5.9% today to 8.5% in 3 years time.
Analysts expect earnings to reach $868.6 million (and earnings per share of $2.96) by about September 2028, up from $602.0 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $1.2 billion in earnings, and the most bearish expecting $689 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 14.4x on those 2028 earnings, down from 16.7x today. This future PE is lower than the current PE for the US Food industry at 19.5x.
Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.

Campbell's Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Heightened input cost pressures from tariffs on imported aluminum (for soup cans) and Rao's Italian sauce, with mitigation options limited by lack of domestic sourcing, are expected to cause significant and lasting margin compression and earnings headwinds-particularly in the Meals & Beverages segment-potentially pressuring long-term profitability and EPS growth.
Persistent volume declines in key categories (notably snacks and ready-to-serve soups), despite stable household penetration, indicate ongoing buy-rate reductions and category headwinds; this suggests risk of continued organic revenue stagnation if consumer demand for traditional processed foods fails to rebound.
Heavy reliance on cost savings and productivity initiatives (increased targets to 5% of cost of goods sold), coupled with ongoing integration of acquisitions, raises the risk that future savings will be harder to realize without impacting operational effectiveness, potentially leading to diminishing returns or increased restructuring costs weighing on net margins.
Secular consumer shift toward fresh, less-processed, and clean-label foods, coupled with strong private label competition in snacks and pantry staples, threatens Campbell's core product relevance-especially among younger demographics-putting long-term revenue growth and market share at risk.
Exposure to concentrated markets (primarily North American soups and snacks) paired with slow underlying category growth and the dilution from recent divestitures increases vulnerability to domestic demand shifts; failure to diversify geographically or to accelerate innovation adoption may constrain top-line growth and earnings resilience over multiple years.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $34.579 for Campbell's based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $62.0, and the most bearish reporting a price target of just $29.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $10.2 billion, earnings will come to $868.6 million, and it would be trading on a PE ratio of 14.4x, assuming you use a discount rate of 6.8%.
Given the current share price of $33.74, the analyst price target of $34.58 is 2.4% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

Have other thoughts on Campbell's?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Consumer Preferences And Operational Efficiency Will Build Future Resilience