The Campbell's Co. (CPB) PT Lowered to $17 at UBS as Top-Line Pressures Persist
UBS analyst Peter Grom lowered the price target on The Campbell's Co. (NASDAQ: CPB) to $17.00 (from $19.00) while maintaining a Sell rating.
The analyst commented, "Earlier this morning CPB reported a 3Q beat as stronger GM/OPM more than offset weaker topline performance (-4.0% vs. -3.3% Street). As for the outlook, the company reiterated its FY26 guidance across the board (see details below), which we think looks somewhat aspirational on the top line even after accounting for some timing related factors. Beyond FY26, much of the conversation has shifted to earnings power in FY27 and to that end management emphasized that inflation would likely be in the +MSD range (+3% and +2-3% of incremental inflation) if oil prices were to stay at $100/barrel. When layering in additional discrete headwinds from a higher share count and a reset of incentive compensation, we think it is clear that FY27 is shaping up to be a challenging year on the bottom line with the magnitude of pressure dependent on where inflation ultimately lands, pricing/RGM, and how much productivity/cost savings the company can generate looking ahead. Shares continue to screen as cheap vs. history but with top line pressures likely to persist looking out to FY27 and little signs that a return to EPS growth is on the horizon, we think the risk/reward continues to skew to the downside."