Campbell's (CPB) cut its fiscal 2026 guidance after delivering soft fiscal Q2 financial results, implying a lower H2 outlook that still looks a bit optimistic, Morgan Stanley said in a note Thursday.
The decreased outlook was "disappointing, though not entirely surprising" compared with muted market expectations, and still seems optimistic considering the more promotional environment and continued share losses, the investment firm said.
With a low bar on valuation, the question now is whether management's initiatives could drive improvements and provide clear evidence of margin recovery given the competitive backdrop, according to the note.
"For now, lingering uncertainty around competitive intensity and weak share trends makes that question difficult for us to answer with conviction," the investment firm said.
The firm cut its fiscal 2026 and 2027 earnings per share estimates for Campbell's by 6% and 8% respectively.
Morgan Stanley lowered its price target on the stock to $25 from $27, while keeping its equal-weight rating.
Price: 22.59, Change: -0.35, Percent Change: -1.53
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