Campbell Soup Shares: Can the Downtrend Be Reversed?

Campbell Soup is navigating a challenging period, yet optimism for a potential recovery is emerging. The company's stock has declined by more than 30% since the start of the year, hovering close to its annual low. Several key developments on the horizon could determine its future trajectory. Has the bottom been reached, or is further decline imminent?

The appointment of Todd Cunfer as the new Chief Financial Officer introduces a seasoned leader with experience from Freshpet and Simply Good Foods Company. His background in the consumer goods sector is expected to bolster Campbell Soup's strategic direction. This leadership change comes at a critical moment. The company reported $10.3 billion in revenue for fiscal year 2025, a figure that underscores its market presence but also highlights the pressing need for growth initiatives.

December is poised to be a decisive month. The quarterly results, due early in the month, will reveal whether Campbell Soup has moved past the worst of its struggles or if additional setbacks lie ahead. With the stock trading near its yearly low, the stakes for a successful turnaround are exceptionally high.

Analyst Sentiment Remains Cautious

Market experts continue to express reservations. DA Davidson recently reduced its price target from $32 to $30, maintaining a "Neutral" rating on the shares. The firm indicated it is "too early to anticipate a turnaround in the snacking business." Overall, skepticism prevails. The consensus rating stands at "Reduce," supported by fifteen hold recommendations and five sell recommendations, contrasted with just three buy ratings.

Should investors sell immediately? Or is it worth buying Campbell Soup?

The range of price targets, spanning from $30 to $39, reflects significant market uncertainty. However, the average target of $33.33 suggests a potential upside of over 20%—provided the company's fundamental performance improves.

Dividend Stability: A Key Investor Attraction?

Despite the stock's poor performance, Campbell Soup remains committed to its dividend policy. The recent quarterly dividend of $0.39 per share was confirmed, offering an attractive yield exceeding 5%. Nevertheless, with a payout ratio of 78%, the company has minimal room for operational missteps.

For numerous shareholders, the reliable dividend serves as the primary reason to maintain their investment. However, this high payout ratio could become problematic if revenue faces continued pressure. The coming financial reports will be crucial in assessing whether this dividend is sustainable.