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Category: Stock Market and Campbell Soup
Date: 3 June 2020 Stock Price: $49.32 We take a look at the 3rd quarter earnings report for the 2020 fiscal year of Campbell's the multinational food company. The group saw a strong increase in their sales as people stockpiled due to the coronavirus pandemic
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About Campbell's Soup Company
Campbell Soup Company (NYSE:CPB) is a multi-national food company headquartered in Camden, N.J., with annual sales of approximately $8.1 billion. We make a range of high-quality soups and simple meals, beverages and snacks. Our company is driven and inspired by our purpose: Real food that matters for life’s moments. For generations, people have trusted us to provide authentic, flavorful and readily available foods and beverages that connect them to each other, to warm memories, and to what’s important today.
Our portfolio is focused on two distinct businesses in our core North American market: Snacks and Meals & Beverages. This focus enables us to leverage iconic brands and strong positions in the market where we have the greatest presence. Led by our iconic Campbell’s brand, our portfolio extends beyond soup to foods such as Pepperidge Farm cookies including Milano and Farmhouse, Goldfish crackers, Snyder’s of Hanover pretzels, Lance sandwich crackers, Kettle Brand and Cape Cod potato chips, Late July snacks, Snack Factory Pretzel Crisps, Pop Secret popcorn, Emerald nuts, V8 beverages, Plum baby food, Swanson broths, Pregopasta sauces, Pace Mexican sauce, and Pacific Foods broths, soups and non-dairy beverages. Soup may be our middle name, but there’s much more to our company, as you will discover. We’re still Campbell, but we are changing in new and exciting ways.
Our portfolio is focused on two distinct businesses in our core North American market: Snacks and Meals & Beverages. This focus enables us to leverage iconic brands and strong positions in the market where we have the greatest presence. Led by our iconic Campbell’s brand, our portfolio extends beyond soup to foods such as Pepperidge Farm cookies including Milano and Farmhouse, Goldfish crackers, Snyder’s of Hanover pretzels, Lance sandwich crackers, Kettle Brand and Cape Cod potato chips, Late July snacks, Snack Factory Pretzel Crisps, Pop Secret popcorn, Emerald nuts, V8 beverages, Plum baby food, Swanson broths, Pregopasta sauces, Pace Mexican sauce, and Pacific Foods broths, soups and non-dairy beverages. Soup may be our middle name, but there’s much more to our company, as you will discover. We’re still Campbell, but we are changing in new and exciting ways.
Overview of Campbell's Soup Company's 3rd quarter 2020 earnings reports
The data below refers to the latest quarter unless specified otherwise
- Net sales: $2.238 billion (up from $1.953 billion for the same quarter of the previous year)
- Net sales of Campbell's increased by 14.6% over the last 12 months
- Total costs and expenses: $1.965 billion (up from $1.708 billion for the same quarter of the previous year)
- Campbell's total costs and expenses increased by 15.05% over the last 12 months
- Slight margin pressure for Campbell's Soup Company as their net sales increased at a slower rate than their total costs and expenses.
- Net earnings: $168 million (up from $84 million for the same quarter of the previous year)
- Diluted earnings per share from continuing operations: $0.56 (up from $0.28 for the same quarter of the previous year)
- PE ratio of Campbell's Soup Company: 22
- Dividend declared for the quarter: $0.35 (unchanged from $0.35 for the same quarter of the previous year)
- Dividend yield of Campbell Soup Company: 2.7%
- Diluted number of shares outstanding: 304 million
- Cash and cash equivalents: $1.242 million
- Cash and cash equivalents per share: $4.08
- Cash and cash equivalents makes up 8.3% of Campbell Soup Company's market capital
- Cash and cash equivalents makes up 9.8% of Campbell Soup Company's total assets
- Total stockholders equity in Campbell Soup Company: $2.581 billion
- Total equity per share: $8.49
- So Campbell Soup Company is trading at 5.8 times its stockholders equity per share which is well outside the expected range of between 2 and 4 times that most firms tend to trade at.
- For perspective the average price to book value of firms in the s&P 500 is 3.7. Read more about the S&P 500 here.
- Cash generated from operations (for the first three quarter of fiscal 2020) : $1.125 billion
- Cash generated from operations per share (for the first three quarter of fiscal 2020) : $3.7
Campbell's Soup Company management commentary on their 3rd quarter 2020 earnings
CAMDEN, N.J.--(BUSINESS WIRE)--Jun. 3, 2020-- Campbell Soup Company (NYSE:CPB) today reported its third-quarter results for fiscal 2020.
Mark Clouse, Campbell’s President and CEO, stated, “Since the onset of the COVID-19 pandemic, we have simplified our mission to keep our people safe, while meeting the urgent need for food and supporting the communities in which we operate. I am incredibly proud of how the entire Campbell organization has mobilized and want to thank our team, especially those on the front lines, for continuing to step up to ensure our food is readily available across North America.
“In the quarter, we experienced unprecedented broad-based demand across our brands as consumers sought food that delivered comfort, quality and value. This demand resulted in double-digit increases in organic sales, adjusted EBIT and adjusted EPS. In addition, Campbell’s products were purchased by millions of new households, with total company household penetration increasing over 6 percentage points in the quarter compared to the third quarter of fiscal 2019.”
Mark Clouse, Campbell’s President and CEO, stated, “Since the onset of the COVID-19 pandemic, we have simplified our mission to keep our people safe, while meeting the urgent need for food and supporting the communities in which we operate. I am incredibly proud of how the entire Campbell organization has mobilized and want to thank our team, especially those on the front lines, for continuing to step up to ensure our food is readily available across North America.
“In the quarter, we experienced unprecedented broad-based demand across our brands as consumers sought food that delivered comfort, quality and value. This demand resulted in double-digit increases in organic sales, adjusted EBIT and adjusted EPS. In addition, Campbell’s products were purchased by millions of new households, with total company household penetration increasing over 6 percentage points in the quarter compared to the third quarter of fiscal 2019.”
Campbell Raises Fiscal 2020 Guidance
As a result of our performance in the third quarter, which was significantly impacted by the increase in demand of our products amidst the COVID-19 pandemic, and our current outlook for continued demand for our products, we are raising our fiscal 2020 outlook for net sales, adjusted EBIT and adjusted EPS as shown in the table below. Although the effect of the COVID-19 pandemic on our sales, adjusted EBIT and adjusted EPS cannot be predicted with certainty, this revised outlook reflects our current expectation of trends through the balance of the fiscal year.
Fiscal 2020 comprises 53 weeks, one additional week compared to fiscal 2019. The benefit of the 53rd week, consistent with the prior fiscal 2020 guidance, is estimated to be worth two points of net sales, adjusted EBIT and adjusted EPS. The outlook for organic net sales excludes the negative impact from the sale of the European chips business along with the estimated contribution of the 53rd week.
2019 results Previous Guidance Updated Guidance
As a result of our performance in the third quarter, which was significantly impacted by the increase in demand of our products amidst the COVID-19 pandemic, and our current outlook for continued demand for our products, we are raising our fiscal 2020 outlook for net sales, adjusted EBIT and adjusted EPS as shown in the table below. Although the effect of the COVID-19 pandemic on our sales, adjusted EBIT and adjusted EPS cannot be predicted with certainty, this revised outlook reflects our current expectation of trends through the balance of the fiscal year.
Fiscal 2020 comprises 53 weeks, one additional week compared to fiscal 2019. The benefit of the 53rd week, consistent with the prior fiscal 2020 guidance, is estimated to be worth two points of net sales, adjusted EBIT and adjusted EPS. The outlook for organic net sales excludes the negative impact from the sale of the European chips business along with the estimated contribution of the 53rd week.
2019 results Previous Guidance Updated Guidance
- Net Sales: $8,107 -1 to +1% +5.5 to +6.5%
- Adjusted EPS: $2.30* +11 to +13% or $2.55 to $2.60 +25 to +27% or $2.87 to $2.92
Campbell's Soup Company (NYSE: CPB) stock price history
The image below, obtained from Google, shows the 5 year stock price history of Campbell's Soup Company and its been a pretty average time for Campbell Soup Company stockholders. 5 years ago the stock was trading at $45.10 and its currently trading at $52.72. That is a % return provided to Campbell Soup Company stockholders over the last 5 years.
The stock of Campbell Soup Company is trading at a lot closer to its 52 week high of $52.83 than it is to its 52 week low of $35.03 which to us is a clear indication that the short term sentiment and momentum of Campbell Soup Company stock is very positive right now, largely due to the fact that the group raised their earnings guidance as they expect consumers to stock up on their products as fears regarding the Coronavirus spreads.
The stock of Campbell Soup Company is trading at a lot closer to its 52 week high of $52.83 than it is to its 52 week low of $35.03 which to us is a clear indication that the short term sentiment and momentum of Campbell Soup Company stock is very positive right now, largely due to the fact that the group raised their earnings guidance as they expect consumers to stock up on their products as fears regarding the Coronavirus spreads.
Recent coverage of Campbell Soup Company
The extract below covers the latest regarding Campbell's as obtained from Barrons
Food giant Campbell Soup reported better-than-expected fiscal third-quarter earnings Wednesday morning. Comparable sales for its quarter ended in April rose 17% year over year to $2.24 billion and earnings came in at 83 cents a share. Wall Street was looking for $2.21 billion in sales and 75 cents in per-share earnings. What’s more, the company raised full-year earnings guidance to about $2.90 a share. Analysts, coming into the earnings report, modeled about $2.83 in per share earnings. It is a solid report
Read the full article here
Food giant Campbell Soup reported better-than-expected fiscal third-quarter earnings Wednesday morning. Comparable sales for its quarter ended in April rose 17% year over year to $2.24 billion and earnings came in at 83 cents a share. Wall Street was looking for $2.21 billion in sales and 75 cents in per-share earnings. What’s more, the company raised full-year earnings guidance to about $2.90 a share. Analysts, coming into the earnings report, modeled about $2.83 in per share earnings. It is a solid report
Read the full article here
Campbell's Soup Company (NYSE: CPB) latest stock valuation
So based on Campbell Soup Company' 3rd quarter 2020 earnings report what do we value Campbell Soup Company's stock at? Based on Campbell Soup Company's latest earnings report and fiscal guidance provided (which they raised) our valuation model provides a target price (full value price) for Campbell's Soup Company stock $46.70 (up from our last valuation of Campbell Soup Company).
We therefore believe the stock of Campbell Soup company is slightly overvalued.
We usually recommend that long term and fundamental investors look to enter a stock at least 10% below our target price, which in this case is $46.70. A good entry point into the stock of Campbell Soup Company would therefore be at $42 or below.
We expect the stock of Campbell's to pull back slightly to levels closer to our target price in coming weeks and months.
We therefore believe the stock of Campbell Soup company is slightly overvalued.
We usually recommend that long term and fundamental investors look to enter a stock at least 10% below our target price, which in this case is $46.70. A good entry point into the stock of Campbell Soup Company would therefore be at $42 or below.
We expect the stock of Campbell's to pull back slightly to levels closer to our target price in coming weeks and months.
Next earnings release of Campbell Soup Company
It is expected that Campbell's Soup Company will release their 4th quarter and full 2020 earnings report in early September 2020