THE CAMPBELL'S COMPANY (CPB): what the price requires
The current priced-in claim for THE CAMPBELL'S COMPANY (CPB) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/CPB
Headline
| Field | Value |
|---|---|
| Ticker | CPB |
| Company | THE CAMPBELL'S COMPANY |
| Current price | $22.05/sh |
| Composition | Meals & Beverages 59% / Snacks 41% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin today | 10.0% |
| Multiple paid | 15x operating income |
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 6% cost of capital with 4% terminal growth over a 5-year stage (computed at the 6% minimum rate; the CAPM rate 5.1% sits below it).
Reconcile: at the x-ray's 9.3% required return this reads ~7.1%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.34σ |
| cohort percentile (of 69 peers) | 29 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 0.89x | 5 | justifies |
| Earnings | 1.00x | 5 | justifies |
| Relative | 0.33x | 5 | justifies |
| Growth | 0.96x | 4 | justifies |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.7%); the inversion above states its own rate.
Per-Model Detail (n=19)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $22.08 | 1.00x | yes | FCF base $0.7B, growth -3% (input: historical growth), terminal g 0.5%, WACC 8.7%, 5yr projection |
| DCF Exit Multiple | Growth | $24.10 | 0.91x | yes | Exit EV/EBITDA: 4.0x / 4.8x / 6.8x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $42.92 | 0.51x | yes | P/E 17.54x (blended: static sector reference 22x + trailing (TTM) 11x), scenarios: 14.8x / 17.5x / 20.3x (bear / base = reference held flat / bull), EV/EBITDA 10.33x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $55.51 | 0.40x | yes | Stage 1: 20% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $21.98 | 1.00x | yes | BV/sh $13.47, ROE (TTM) 15.1%, ke 9.3% |
| Two-Stage Excess Return | Asset | $27.75 | 0.79x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $12.80 | 1.72x | yes | Rev $9.9B, growth -3% (input: historical growth; tapered), Terminal P/S: 0.6x / 0.7x / 0.8x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $24.36 | 0.90x | yes | EPS $2.03, growth 2% (input: historical EPS growth), PEG=5.42 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $33.20 | 0.66x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.19B × (1−22%) / WACC 8.7% → EPV (no growth) |
| Residual Income | Asset | $28.44 | 0.78x | yes | BV $13.47 + 5yr PV of (ROE (TTM) 15.1% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $24.81 | 0.89x | yes | √(22.5 × EPS $2.03 × BVPS $13.47) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $68.99 | 0.32x | yes | EBITDA $1.53B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $21.66 | 1.02x | yes | FCF $671.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $19.74 | 1.12x | yes | SBC-adj FCF $0.62B (FCF $0.67B − SBC $0.05B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $65.50 | 0.34x | yes | EPS $2.03 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $6.02 | 3.66x | yes | BV $13.47 × (ROIC 3.9% / WACC 8.7%) |
| P/Sales Sector | Relative | $66.41 | 0.33x | yes | Revenue $9.93B × sector P/S 2.0x |
| PEG Fair Value | Relative | $76.12 | 0.29x | yes | EPS $2.03 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $21.95 | 1.00x | yes | EPS $2.03 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $7.6b |
| Net debt / NOPAT (after-tax) | 9.69x |
| Net debt / operating income (pre-tax) | 7.56x |
| Interest coverage | 3.0x |
| Share count CAGR (buyback) | -0.2% |
| Burning cash | no |
Bullet Takeaways
- The Campbell's Company runs two segments: Meals & Beverages (about 59%, the soup and sauce core, now anchored by Rao's) and Snacks (about 41%, Goldfish, Pepperidge Farm). The trajectory is mixed: Rao's in-market consumption grew 14.5% in a recent quarter, but Snacks net sales fell about 6% with margins compressing.
- At $21.13 the stock is value-supported across the board: asset, earnings-power, relative-multiple, and growth methods all sit at or above the price. The multiple is so low it sits below what even a steady 5%-a-year operating decline would warrant.
- The weight on the other side is leverage. Net debt sits near $7.6B against trailing operating income near $1.1B, leaving net-debt-to-operating-income near 7x, the legacy of the Sovos and Rao's acquisitions. The 3.4x interest coverage and a roughly 5% dividend yield are the support; the debt is the constraint.
Bull Case
Read the earnings trajectory by segment, because the blended number hides a real divergence. Meals & Beverages is reaccelerating: Rao's in-market consumption grew 14.5% in a recent quarter and management expects high-single-digit growth for the brand for the full year, with Rao's now past $1 billion in trailing-twelve-month net sales. That is the prize Campbell's bought, a premium Italian sauce brand growing double digits inside a portfolio long defined by slow-growth canned soup. The company reinforced the bet by acquiring a 49% interest in the maker of Rao's sauces on May 4, 2026. The direction of the premium portfolio is up, and it is becoming a larger share of the mix.
The value case rests on how cheaply that earnings stream is priced. At $21.13 (June 27, 2026) the stock trades at about 15x company-wide operating income, a multiple so low the price sits below what even a steady 5%-per-year operating decline would warrant. Nearly every valuation lens lands at or above the price: DCF perpetual growth near $22, simple excess return near $22, the FCF-yield capitalization near $22, and Earnings Power Value near $33. The relative-multiple lens near $43 and the Graham number near $25 sit above the price. For a defensive staples business with a roughly 5% dividend yield, that is a compelling entry on the methods.
The defensive qualities are intact. Campbell's products are everyday staples that sell through recessions, the Goldfish and Pepperidge Farm snack brands have durable shelf presence, and the soup business, while slow, is a stable cash generator. The 10-K notes earnings benefited from the Sovos acquisition contribution and from pension and benefit income (accession 0000016732-25-000112), and the company has been steadily reducing share count. The bull case is not a growth story; it is a value-and-income story: a portfolio repositioning toward premium, faster-growing brands, bought at a price the valuation methods say is cheap, paying a high-single-digit-supported dividend while the mix shift plays out.
Bear Case
The capital-allocation record is where the bear case starts, because it explains the balance sheet that now constrains the company. Campbell's bought Sovos Brands for about $2.7 billion in 2023 and followed with a 49% stake in the Rao's sauce maker, financing a portfolio pivot largely with debt. Net debt now sits near $7.6B against trailing operating income near $1.1B, leaving leverage near 7x and interest coverage at just 3.4x. That is a heavy load for a low-growth staples company, and rising interest expense was explicitly cited as a drag on earnings. Management is paying up for growth brands while the legacy business stagnates, and if the acquired growth disappoints, the company is left with the debt and the slow core.
The core is, in fact, eroding. Snacks net sales fell about 6% in a recent quarter and the segment margin dropped roughly 390 basis points, with management guiding the second half down about 4%. Snacks was supposed to be the growth-and-margin engine of the portfolio, and it is shrinking. Canned soup, the historic identity, faces secular decline as consumers shift toward fresh and premium options. So the bull's mix-shift story has a flip side: the parts that are growing are the small, expensive acquisitions, while the large, established segments are flat-to-down. Trailing revenue growth is negative, and the discounted-future-market-cap method, which extrapolates that decline, lands near $12, well below the price.
The valuation that looks cheap is cheap for a reason. The Peter Lynch screen flags the stock overvalued at a PEG above 5 because earnings growth is minimal, and the through-cycle picture is of a deleveraging story competing with a dividend the company clearly wants to protect. A roughly 5% yield on a 7x-levered balance sheet with declining snacks and soup is the kind of high yield that signals risk, not just value. The bet against Campbell's is that the acquisitions do not grow fast enough to outrun the legacy decline and the interest burden, and that the cheap multiple reflects a business slowly shrinking under its own debt rather than a bargain.
Valuation
At $21.13, inverting the price puts Campbell's at roughly 15x company-wide operating income, a multiple low enough that the price sits below what even a steady 5%-a-year operating decline would warrant. This is a bound rather than a single solved growth rate, and it places the stock in the lower half of its consumer-staples peer multiple range. The near-term implied pace is within what the company has recently delivered; the market is simply applying a low multiple to a slow-growth, levered name.
The model families are unusually aligned on the value side. DCF perpetual growth lands near $22, DCF exit-multiple near $23, simple excess return near $22, the FCF-yield capitalization near $22, and Earnings Power Value near $33, all at or above the price. The relative-multiple lens near $43 and the Graham number near $25 sit above it. The discounted-future-market-cap method near $12 is the lone low outlier, because it extrapolates the negative trailing revenue growth. The blended X-ray near $24 sits modestly above the price.
The valuation conclusion is that the methods support the price on current earnings, but they all assume the business does not decline materially from here. The cheapness is real on an earnings and asset basis, and the dividend yield near 5% is a genuine support. The risk is that the methods anchored to current operating income overstate fair value if Snacks keeps shrinking and the debt load forces a payout reset. The deciding variable is whether the Rao's-led premium mix shift offsets the Snacks and soup decline fast enough to stabilize earnings while leverage comes down.
Catalysts
The next earnings report, scheduled for June 8, 2026, is the near-term checkpoint. The key reads are whether Snacks stabilizes after the roughly 6% decline and 390-basis-point margin drop, and whether Meals & Beverages holds its Rao's-driven momentum. Management guided Snacks down about 4% in the second half, so any deviation from that frames the trajectory.
Rao's is the growth catalyst to watch. In-market consumption grew 14.5% with high-single-digit full-year growth expected, and the May 4, 2026 acquisition of a 49% interest in the Rao's sauce maker deepens the bet. Campbell's expects that transaction to be neutral to fiscal 2026 adjusted EPS, so the payoff is in the growth it adds, not near-term earnings. Continued double-digit Rao's consumption would validate the premium-mix strategy.
Deleveraging is the structural catalyst. With net debt near $7.6B and interest coverage at 3.4x, the path of debt reduction and the security of the dividend are what determine whether this is a value opportunity or a value trap. Watch free-cash-flow generation, the leverage ratio, and any commentary on the payout. Input-cost inflation and private-label competition in soup and snacks are the external pressures on margin.
Sources: Campbell's Rao's and Sovos strategy (Yahoo Finance), Campbell's news (StockTitan), Campbell's earnings dates (TipRanks)
Peer Cohorts (Per Segment, With Filing Citations)
Meals & Beverages (reported)
- CAG (CONAGRA BRANDS, INC.)
- (no filing in the citation store)
- GIS (GENERAL MILLS INC)
- (no filing in the citation store)
- SJM (THE J. M. SMUCKER COMPANY)
- (no filing in the citation store)
- KHC (Kraft Heinz Co)
- (no filing in the citation store)
- HRL (HORMEL FOODS CORPORATION)
- (no filing in the citation store)
- MKC (McCORMICK & COMPANY, INCORPORATED)
- (no filing in the citation store)
Snacks (reported)
- MDLZ (Mondelez International, Inc.)
- (no filing in the citation store)
- HSY (HERSHEY CO)
- (no filing in the citation store)
- KHC (Kraft Heinz Co)
- (no filing in the citation store)
- GIS (GENERAL MILLS INC)
- (no filing in the citation store)
- CAG (CONAGRA BRANDS, INC.)
- (no filing in the citation store)
- FLO (FLOWERS FOODS, INC)
- (no filing in the citation store)
- JJSF (J&J SNACK FOODS CORP.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.