TD Cowen has reiterated a Hold rating on Campbell Soup Company (NYSE: CPB) shares, citing weak guidance and a 36% dividend cut after the food manufacturer reported fourth-quarter results below expectations.
The brokerage maintained a $22 price target on Campbell’s stock, which was trading at $22.33 at the time of the note. The target remains below the company’s fair value estimate, reflecting concerns over the company’s near-term outlook despite its 7.2% dividend yield.
Campbell’s adjusted earnings per share guidance for fiscal 2027 was set at a range of $1.65 to $1.80, below the consensus estimate of $1.83 and well short of the prior consensus of $1.90. Organic net sales are projected to decline between 4% and 2%, exceeding the market’s expectation of a 1% decline. Adjusted EBIT is forecast to fall between 12% and 7%, further pressuring profitability.
The guidance follows a 36% reduction in Campbell’s dividend, ending a 56-year streak of consistent payouts. The company also announced a $500 million cost-savings program over four years, including a 13% workforce reduction that has already been implemented.
Fourth-quarter results showed adjusted EPS of $0.39, matching analyst expectations, but revenue of $2.1 billion fell short of the $2.15 billion forecast. Organic net sales declined 1% year-over-year, primarily due to lower volume and product mix, with an extra week in the prior year contributing an estimated 7% to sales.
Campbell’s stock has fallen 23% year-to-date and 35% over the past 12 months. Seven analysts have revised their earnings estimates downward for the upcoming period, underscoring the challenges facing the company amid shifting consumer demand and cost pressures.
