Campbell Soup Company (CPB) delivered a solid performance in its recent quarterly earnings report, beating analysts’ earnings expectations but falling short on revenue. The company reported earnings of $0.63 per share, exceeding the Zacks Consensus Estimate of $0.62 per share, representing a 1.61% earnings surprise. This marks the fourth consecutive quarter where Campbell has surpassed consensus EPS estimates. However, the company’s revenue for the quarter ended July 2024 came in at $2.29 billion, missing the Zacks Consensus Estimate by 0.44% and falling short of the year-ago revenue of $2.07 billion. Despite this mixed performance, Campbell has been a strong performer this year, with shares rising about 16.1% since the beginning of the year, slightly trailing the S&P 500’s gain of 17.2%.
While the recent earnings report provides some positive indicators, the future outlook for Campbell remains uncertain. Investors are understandably eager to know what’s next for the stock. One key factor that can provide insights into future performance is the company’s earnings outlook. This includes current consensus earnings expectations for upcoming quarters and how those expectations have changed recently. Historical data suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can either track these revisions independently or rely on rating tools like the Zacks Rank, which utilizes the power of earnings estimate revisions to assess stock performance.
Looking ahead, the estimate revisions trend for Campbell is mixed. While the direction and magnitude of revisions could shift following the recent earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. This suggests that the shares are expected to perform in line with the market in the near future. It will be interesting to see how estimates for upcoming quarters and the current fiscal year evolve in the days ahead. The current consensus EPS estimate is $0.93 on $2.8 billion in revenues for the upcoming quarter and $3.23 on $10.51 billion in revenues for the current fiscal year.
It’s important for investors to remember that the outlook for the entire industry can significantly impact the performance of a stock. The Food – Miscellaneous industry, to which Campbell belongs, is currently ranked in the top 39% of the 250+ Zacks industries. Research has shown that the top 50% of Zacks-ranked industries consistently outperform the bottom 50% by more than a 2-to-1 factor.
Another notable company within this industry, United Natural Foods (UNFI), is yet to report its results for the quarter ended July 2024. This organic and specialty foods distributor is projected to post a quarterly loss of $0.08 per share in its upcoming report, representing a year-over-year change of +68%. The consensus EPS estimate for the quarter has remained unchanged over the past 30 days. United Natural Foods’ revenues are expected to reach $7.87 billion, representing a 6.2% increase from the year-ago quarter.
Overall, Campbell’s recent earnings performance is positive, but the company’s future prospects remain uncertain. The stock is currently rated a Zacks Rank #3 (Hold), indicating potential for in-line market performance. Investors should closely monitor earnings estimate revisions and industry trends to gain a clearer understanding of Campbell’s future trajectory.
