What Happened?

Shares of packaged food company Campbell's (NASDAQ: CPB) fell 3% in the morning session after several financial institutions expressed a more cautious outlook on the company, with multiple analysts cutting their price targets and a credit rating agency lowering its debt rating. 

Morgan Stanley lowered its price target to $28 from $30, citing caution about near-term challenges in the company's snacking categories. BofA Securities and Barclays also reduced their price targets. Further weighing on the stock, Fitch Ratings downgraded Campbell's long-term debt rating to 'BBB-' from 'BBB'. The credit agency pointed to sustained high leverage and projected a 13% decline in a key measure of earnings (EBITDA) for fiscal 2026.

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What Is The Market Telling Us

Campbell’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 5 months ago when the stock gained 4.8% on the news that the company reported second-quarter earnings that surpassed Wall Street expectations. 

The food company posted adjusted earnings of 62 cents per share, beating the average analyst estimate of 57 cents. Revenue for the quarter came in at $2.32 billion, roughly in line with the consensus forecast of $2.33 billion. Despite the earnings beat, the results were mixed as sales volumes fell 4% year-over-year. Looking ahead, Campbell's provided guidance for fiscal 2026 adjusted earnings per share between $2.40 and $2.55, with the midpoint of the range falling short of analysts' expectations.

Campbell's is down 5.7% since the beginning of the year, and at $26.14 per share, it is trading 37.8% below its 52-week high of $42.04 from March 2025. Investors who bought $1,000 worth of Campbell’s shares 5 years ago would now be looking at an investment worth $563.69.

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