Campbell's EPS Outlook Revised Lower Amid Revenue Decline

Zacks Research has lowered its earnings per share estimate for The Campbell's Company for the second quarter of fiscal 2027. The analyst team now projects EPS of $0.43, a reduction from the previous forecast of $0.46. This adjustment follows a period of soft performance for the food and beverage maker, which recently reported quarterly revenue of $2.14 billion. The company's revenue declined by 7.9% compared to the same period in the prior year.

Campbell's reported EPS of $0.39 for the latest quarter, meeting the consensus estimate of $0.39. However, the bottom line was significantly lower than the $0.62 posted a year earlier. The business maintained a net margin of 4.04% and a return on equity of 16.44%. Zacks Research currently holds a 'Strong Sell' rating on the stock, reflecting concerns over the company's recent financial trajectory and market positioning.

Forward Estimates and Guidance

The Zacks Research report includes a full range of forward-looking estimates for Campbell's. For the third quarter of fiscal 2027, the firm expects EPS of $0.44, and for the fourth quarter, $0.42. The full-year fiscal 2027 estimate stands at $1.71 per share. Looking further ahead, the analyst projects EPS of $1.86 for fiscal 2028 and $1.96 for fiscal 2029. These figures suggest a gradual recovery in profitability, though the initial dip in Q2 2027 remains a point of scrutiny for investors.

Campbell's official guidance for fiscal 2027 places EPS in a range of $1.65 to $1.80. The consensus estimate for the current full-year earnings is $1.70 per share, sitting comfortably within the company's stated boundaries. The Zacks Research estimate of $1.71 for FY2027 aligns closely with this market consensus, indicating that the broader analyst community expects the company to land near the upper end of its own guidance range.

Market Sentiment and Valuation

Sentiment from other institutions remains mixed to negative. According to data from GN markets/earnings (en-US), twelve analysts rate the stock as Hold and seven as Sell, resulting in an average rating of Reduce. The average price target stands at $19.88. Recent moves include JPMorgan raising its target to $22.00 with a neutral stance, while Barclays cut its target to $18.00 with an underweight rating. Evercore set a $21.00 target, and Stifel Nicolaus lifted its outlook to $22.00 with a hold recommendation.

Campbell's trades with a P/E ratio of 16.17 and a market capitalization of $6.32 billion. The stock's 50-day moving average is $22.48, while the 200-day average is $21.93. The company carries a debt-to-equity ratio of 1.60 and a current ratio of 0.82. Despite the cautious outlook from some analysts, institutional interest persists, with Dimensional Fund Advisors increasing its stake by 23.3% in the first quarter.

Dividend Payout and Shareholder Returns

The company continues to distribute dividends to shareholders, with a quarterly payout of $0.25 per share. This translates to an annualized dividend of $1.00 and a yield of 4.7%. The ex-dividend date is set for October 1st, with payment scheduled for November 2nd. Notably, the company's payout ratio stands at 119.08%, meaning the dividend exceeds current earnings, a factor that may weigh on long-term sustainability if revenue does not stabilize.