Campbell's Co (CPB) delivered a solid first quarter on Tuesday, but Wall Street isn't exactly popping champagne. The soup and snacks giant beat expectations on both the top and bottom lines, yet shares still slipped as analysts turned their attention to what's coming next.
The numbers themselves looked good enough. Campbell's posted earnings of 77 cents per share, comfortably ahead of the 73-cent consensus estimate. Revenue came in at $2.677 billion, edging out expectations of $2.657 billion. So far, so good.
Then came the guidance, and suddenly the narrative shifted. For fiscal 2026, Campbell's expects organic net sales to land somewhere between a 1% decline and 1% growth compared to fiscal 2025's $9.98 billion. More concerning for investors, adjusted EBIT is projected to drop between 9% and 13% from fiscal 2025 levels of $1.46 billion.
The company's adjusted earnings per share outlook sits between $2.40 and $2.55, marking a 12% to 18% decline from the $2.91 Campbell's delivered in fiscal 2025. The guidance matches the company's prior range and aligns with the Street's $2.45 estimate, but it still paints a picture of a business facing headwinds.
Campbell's shares dropped 1.6% to $28.03 on Wednesday, and several analysts responded by lowering their price targets.
Bernstein analyst Alexia Howard kept an Outperform rating on the stock but cut her price target from $39 to $33. Stifel's Matthew Smith maintained his Hold rating while trimming his target from $34 to $30. RBC Capital's Nik Modi stuck with a Sector Perform rating but reduced his target from $35 to $30. UBS analyst Peter Grom, the most bearish of the group, maintained his Sell rating and lowered his target from $28 to $26.
The pattern here is telling. None of these analysts changed their fundamental view on the stock—the ratings all stayed the same. But they're adjusting expectations to reflect the reality that Campbell's is entering a period of contraction rather than growth. Beating estimates is nice, but when the road ahead looks bumpy, price targets have to come down accordingly.
