Yahoo Finanza Campbell Soup Tops Earnings Estimates, Fiscal 2022 Outlook Disappoints
The Camden County, New Jersey-based soups and snacks maker Campbell Soup reported higher-than-expected earnings and revenue in the fiscal fourth quarter but forecast profit and sales below expectations in its fiscal 2022 year.
The processed food and snack company said its earnings Per Share (EPS) from continuing operations were $0.95 and adjusted EPS fell $0.08, or 13%, to $0.55. It was still higher than Wall Street consensus estimates of $0.47 per share.
The company’s net sales slumped 11% versus the prior year to $1.87 billion compared to $2.11 billion registered a year ago. That was still higher than the market expectations of $1.81 billion.
The board of directors also approved a $500 million strategic share repurchase program that pushed the Campbell Soup shares up over 1.4% to $42.33 in pre-market trading on Wednesday. The stock fell about 13% so far this year.
Campbell forecasts adjusted earnings of $2.75-2.85 per share for fiscal 2022, and net sales of flat to a 2% decline. According to Reuters, those expectations were lower compared to market estimates of $2.87 per share and nearly 1% decline, respectively.
According to the company, the first quarter will be the most challenging since sales and scale efficiencies have increased since a year ago, while pricing has begun to take effect. “First half margins will continue to be impacted by transitional headwinds, with comparisons easing and sequential improvement in the second half of the fiscal year versus a year ago.”
Analyst Comments
“High exposure to secularly challenged soup category: Shelf-stable soup (26.5% of sales) faces headwinds given shifts in preferences toward better-for-you and fresh foods, competition from private label, and pricing pressure. Snacking brands are well-positioned, but face competitive pressures: Milano, Goldfish, Farmhouse, and Snyder’s-Lance have strong brand equity but face high competition from PEP and MDLZ,” noted Pamela Kaufman, equity analyst at Morgan Stanley.
“Significant organizational changes over last two years refocused the company and show promise: Divesting non-core businesses and new leadership refreshes the company’s strategic plan, allowing the company to focus on its key segments and geographies.”
Campbell Soup Stock Price Forecast
Seven analysts who offered stock ratings for Campbell Soup in the last three months forecast the average price in 12 months of $47.71 with a high forecast of $59.00 and a low forecast of $41.00.
The average price target represents a 14.33% change from the last price of $41.73. From those seven analysts, one rated “Buy”, six rated “Hold” while none rated “Sell”, according to Tipranks.
Morgan Stanley gave the base target price of $48 with a high of $66 under a bull scenario and $30 under the worst-case scenario. The firm gave an “Equal-weight” rating on the packaged food company’s stock.
Several other analysts have also updated their stock outlook. Jefferies slashed the target price to $45 from $50. JPMorgan lowered the price target to $45 from $46. Credit Suisse cut the price objective to $41 from $46.
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This article was originally posted on FX Empire
