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Category: Stock Market and Campbell Soup
Date: 5 March 2020 Stock Price: $52.72 We take a look at the 2nd quarter earnings report for the 2020 fiscal year of Campbell's the multinational food company. the stock price of Campbell's spiked after the release of their 2nd quarter 2020 earnings report as people stockpile their soup products due to Coronavirus fears.
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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.
Campbell's Pepperidge Farm Milano Cookies
Overview of Campbell's Soup Company's 2nd quarter 2020 earnings reports
The data below refers to the latest quarter unless specified otherwise
- Net sales: $2.162 billion (down from $2.172 billion for the same quarter of the previous year)
- Net sales of Campbell's decreased by -0.46% over the last 12 months
- Total costs and expenses: $1.812 billion (down from $1.847 billion for the same quarter of the previous year)
- Campbell's total costs and expenses decreased by -1.89% over the last 12 months
- Slight margin gains for Campbell's Soup Company as their net sales decreased at a slower rate than their total costs and expenses.
- Net earnings: $1.208 billion (up from -$59 million for the same quarter of the previous year)
- Diluted earnings per share from continuing operations: $0.56 (down from $0.58 for the same quarter of the previous year)
- PE ratio of Campbell's Soup Company: 23.5
- 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: $58 million
- Cash and cash equivalents per share: $0.19
- Cash and cash equivalents makes up 0.36% of Campbell Soup Company's market capital
- Cash and cash equivalents makes up 0.49% of Campbell Soup Company's total assets
- Total stockholders equity in Campbell Soup Company: $2.499 billion
- Total equity per share: $8.22
- So Campbell Soup Company is trading at 6.41 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.
- Cash generated from operations (for the first two quarter of fiscal 2020) : $663 million
- Cash generated from operations per share (for the first two quarter of fiscal 2020) : $2.08
Campbell's Soup Company management commentary on the results and earnings guidance
CAMDEN, N.J.--(BUSINESS WIRE)-- Campbell Soup Company (NYSE:CPB) today reported its second-quarter results for fiscal 2020.
CEO Comments
Mark Clouse, Campbell’s President and CEO, stated, “I am pleased that we delivered another high-quality quarter with organic sales, and adjusted gross margin, EBIT and earnings, growing in-line with or above our expectations. Additionally, I am very pleased with our successful deleveraging in the quarter, resulting in a much-improved leverage ratio. Given the momentum of the business and lower adjusted interest expense from our debt reduction, we are able to make important incremental investments in the business in the second half while increasing adjusted EPS guidance for the year.”
CEO Comments
Mark Clouse, Campbell’s President and CEO, stated, “I am pleased that we delivered another high-quality quarter with organic sales, and adjusted gross margin, EBIT and earnings, growing in-line with or above our expectations. Additionally, I am very pleased with our successful deleveraging in the quarter, resulting in a much-improved leverage ratio. Given the momentum of the business and lower adjusted interest expense from our debt reduction, we are able to make important incremental investments in the business in the second half while increasing adjusted EPS guidance for the year.”
Campbell Raises Fiscal 2020 Adjusted EPS Guidance
Campbell now expects adjusted EPS to be in the range of $2.55 to $2.60 per share, reflecting lower adjusted net interest expense due to reduced debt and EBIT momentum through the first half, which will be partly offset by incremental investments in the business in the second half of the year. Campbell continues to expect full-year reported and organic net sales, as well as adjusted EBIT, to be consistent with guidance provided on Dec. 04, 2019.
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.
Campbell now expects adjusted EPS to be in the range of $2.55 to $2.60 per share, reflecting lower adjusted net interest expense due to reduced debt and EBIT momentum through the first half, which will be partly offset by incremental investments in the business in the second half of the year. Campbell continues to expect full-year reported and organic net sales, as well as adjusted EBIT, to be consistent with guidance provided on Dec. 04, 2019.
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.
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.
Campbell's (NYSE: CPB) stock price history over the last 5 years
Recent coverage of Campbell Soup Company
The extract below covers the latest regarding Campbell's as obtained from The Wall Street Journal
Campbell Soup Co. said retailers are stocking up on its namesake product and other canned foods in response to the coronavirus epidemic, a boost to the beleaguered food maker’s sales. The soup giant, which also sells crackers, cookies, nuts and other dry goods, said Wednesday that retailers are also buying more of its less popular items such as SpaghettiOs and Swanson canned chicken. Campbell said it is treating the epidemic as it would a storm or other natural disaster, making sure it has extra ingredients and finished products...
Read the full article here
Campbell Soup Co. said retailers are stocking up on its namesake product and other canned foods in response to the coronavirus epidemic, a boost to the beleaguered food maker’s sales. The soup giant, which also sells crackers, cookies, nuts and other dry goods, said Wednesday that retailers are also buying more of its less popular items such as SpaghettiOs and Swanson canned chicken. Campbell said it is treating the epidemic as it would a storm or other natural disaster, making sure it has extra ingredients and finished products...
Read the full article here
Three cheese lasagna using Campbell's Prego brands traditional Italian Sauce
Campbell's Soup Company (NYSE: CPB) latest stock valuation
So based on Campbell Soup Company' 2nd 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 our valuation model provides a target price (full value price) for Campbell's Soup Company stock $51.20 (up from our last valuation of Campbell Soup Company).
We therefore believe the stock of Campbell Soup company is close to being fully valued.
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 $51.20. A good entry point into the stock of Campbell Soup Company would therefore be at $46 or below.
We expect the stock of Campbell's to trade in a narrow range around its current price in coming weeks and months as it is close to its full value
We therefore believe the stock of Campbell Soup company is close to being fully valued.
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 $51.20. A good entry point into the stock of Campbell Soup Company would therefore be at $46 or below.
We expect the stock of Campbell's to trade in a narrow range around its current price in coming weeks and months as it is close to its full value
Next earnings release of Campbell Soup Company
It is expected that Campbell's Soup Company will release their 3rd quarter 2020 earnings report in early June 2020