Shares of Campbell Soup (NYSE:CPB) have declined 18% since the start of this year. The stock was in negative territory heading into June and then nosedived further after releasing its latest earnings numbers.
This was even with the company performing reasonably well in its third-quarter results for fiscal 2023. Net sales of $2.2 billion rose 5% year over year and adjusted earnings per share (EPS) of $0.68 was higher than analyst estimates of $0.65. The results were in-line with the company's expectations.
However, the company's adjusted EPS forecast for fiscal 2023 was a range of $2.95 and $3.00, just shy of Wall Street expectations of $3.01. It isn't a big delta but it has been enough to send the stock reeling. Investors may also be wary about whether the company can continue benefiting from rising prices, with CEO Mark Clouse stating that "favorable inflation-driven net price realization" was a key reason for the company's strong earnings numbers.
At 15 times forward earnings, Campbell's stock is trading at a lower multiple than the S&P 500 average of 20. And with the falling price, its stock is now yielding 3.2%. As of the end of last week, the stock was also trading a dollar away from its 52-week low of $45.42.
Between the depressed valuation, a high dividend yield, and some strong brands and products in its portfolio, Campbell's could be a great buy on the dip right now, particularly if you're planning to buy the stock and hold for the long term.
