Analysts: Campbell's Soup Will Cool Down

Campbell Soup Co. CPB reported second-quarter results that beat expectations Wednesday, but analysts say the iconic company’s overall business isn’t exactly heating up.

Campbell’s shares traded up by about 5 percent after the report of better-than expected earnings of 77 cents per share in the quarter ended Jan. 27, beating Street estimates by more than a nickel. 

The Analysts

Bank of America Merrill Lynch’s Bryan Spillane reiterated an Underperform rating on the stock with a $30 price target.

Tigress Financial analyst Ivan Feinseth recommends selling Campbell’s stock on the new strength, with the expectation it could fall into the low $30s.

BofA 

Spillane wrote in a note to investors that Bank of America believes 2019 will bring profit and earnings declines to Campbell’s — and that high levels of debt will keep its value suppressed.

Tigress

Feinseth dismissed the Wednesday market gains for Campbell’s as an overreaction to unexpected positive results along with elevated short interest.

“Campbell’s core businesses continue to struggle at the same time it is selling many of its dense growth businesses,” Feinseth said, referring to Campbell’s move to unload Garden Fresh Gourmet and Bolthouse Farms. “Continue to view any strength as a selling opportunity.”

Price Action

Campbell's stock was down 0.55 percent at $36.01 at the close Thursday.

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