The Campbell’s Company (NASDAQ:CPB) is one of the best undervalued defensive stocks for 2026. On March 13, UBS cut the price target on The Campbell’s Company (NASDAQ:CPB) to $20 from $24 while maintaining a Sell rating on the shares. The rating update came after The Campbell’s Company (NASDAQ:CPB) reported its fiscal Q2 2026 financial results on March 11, reporting that net sales decreased 5% to $2.6 billion and decreased 3% on an organic basis. In addition, Earnings Before Interest and Taxes (EBIT) droppe ...

Core Viewpoint - Campbell's has rebranded itself from Campbell Soup Company to The Campbell's Company to reflect its diverse portfolio beyond soups, which includes brands like Goldfish and Rao's pasta sauce [1] Company Overview - Campbell's market capitalization is currently less than $7 billion, making it one of the smallest components in the S&P 500, raising concerns about its continued inclusion in the index [2] - The company's stock has faced pressure due to weak performance in its snack segment, which has seen a 6% decline in sales, contributing to a reduced full-year guidance [4] Financial Performance - In the second quarter of fiscal 2026, Campbell's snacks segment generated only $67 million in operating earnings from $914 million in revenue, resulting in a 7.3% operating margin, while meals and beverages produced $252 million in operating earnings from $1.65 billion in revenue, with a higher margin of 15.3% [4] - The company's fiscal 2026 earnings per share guidance is projected to be between $2.15 and $2.25, which exceeds its annual dividend payment of $1.56, indicating a potential for value [9] Brand Performance - The acquisition of Snyder's-Lance in 2018 has negatively impacted the snack segment, which is currently the worst-performing area of the business [5] - However, management remains optimistic about brands like Cape Cod and Kettle, which are expected to perform well in the long term due to their differentiation [5] - Over half of Campbell's condensed soup portfolio is experiencing growth, particularly cooking soups that are used as ingredients rather than standalone meals [6] Investment Perspective - Despite current challenges, Campbell's is viewed as a compelling value stock for investors seeking passive income, especially given its high dividend yield of 7.19% and low valuation [8][11] - The company is encouraged to focus on its high-margin meal brands to appeal to health-conscious consumers, which could reduce marketing costs and enhance profitability [11]

Core Viewpoint - Campbell's stock has significantly declined, with a 22% drop from its year-to-date high, following disappointing Q2 earnings and lowered full-year guidance, leading to a bearish outlook from investor Jim Cramer [1][1][1] Financial Performance - In Q2, Campbell reported earnings of 51 cents per share, with a 5% decline in sales to $2.56 billion, both figures falling short of consensus expectations [1][1] - The company has revised its 2026 outlook, projecting a notable decrease in adjusted EPS to approximately $2.2 [1][1] Market Position and Consumer Trends - Campbell's core product, its soup line, is experiencing "structural erosion," with significant declines in the US soup category, which is critical to its identity [1][1] - There is a noticeable shift in consumer preferences away from traditional canned goods, impacting organic net sales and indicating a long-term challenge for the brand [1][1] Strategic Challenges - Despite an aggressive move into the snacks market intended to drive growth, the performance has been disappointing, particularly following the acquisition of Snyder's-Lance [1][1] - The management's decision to suspend the share repurchase program to focus on debt reduction raises concerns about the company's financial health and future prospects [1][1] Leadership and Institutional Standing - Cramer criticizes Campbell's leadership for failing to capitalize on past opportunities, suggesting that the company's status as a great American institution is in jeopardy [1][1] - The narrative surrounding Campbell has shifted from being a defensive staple to a potential value trap, with the current situation making a turnaround increasingly unlikely [1][1]

Core Insights - General Mills has unexpectedly cut its full-year fiscal 2026 guidance, expecting organic net sales to decline between 1.5% and 2%, and adjusted diluted EPS to fall by 16% to 20% [1][2] - Both General Mills and Campbell's are experiencing significant stock declines, with both companies down more than 50% from their all-time highs, indicating a sectorwide slowdown in consumer staples, particularly in packaged foods [2][4] Company Performance - General Mills reaffirmed its prior guidance just two months ago, highlighting the unexpected nature of the recent cut [2] - The company is facing challenges due to weak consumer sentiment and significant volatility, which have impacted category growth and consumer purchase patterns [6] - General Mills has a strong dividend track record, having paid dividends without interruption for 127 years, with a current dividend yield of 5.45% [12][13] Market Conditions - The consumer staples sector was the worst-performing sector in 2025, with packaged food companies like General Mills and Campbell's hitting multiyear lows [4] - Changing consumer preferences are affecting packaged foods, with a shift towards healthier meal and snack options, impacting brand value for companies reliant on traditional products [5][8] Financial Strategies - Both General Mills and Campbell's are implementing cost-saving strategies to improve efficiency, with General Mills forecasting $100 million in efficiency savings for fiscal 2026 and Campbell's predicting $70 million [10] - Despite earnings and margin compression, both companies remain highly profitable and are expected to cover their dividends even amid declining earnings [15] Investment Outlook - General Mills and Campbell's are considered high-yield deep value stocks, with low investor expectations due to weak near-term guidance, making them attractive for long-term investors focused on brand durability and dividend reliability [18][19] - Both stocks are trading at substantial discounts to their 10-year median price-to-earnings and price-to-free-cash-flow ratios, indicating potential value for investors [17]

Core Viewpoint - The Campbell's Company has appointed Mohit Anand as Executive Vice President and President of Snacks, effective February 23, 2026, to lead its snack brand portfolio [1] Company Summary - Mohit Anand will oversee a portfolio that includes well-known snack brands such as Goldfish, Pepperidge Farm, Snyder's of Hanover, Lance, Kettle Brand, Cape Cod, Snack Factory, and Late July [1] - Anand will report directly to Campbell's President and CEO Mick Beekhuizen and will become a member of the company [1]

Group 1 - The Campbell's Company (NASDAQ:CPB) has a stock yield of just under 5%, which raises questions about its attractiveness as an investment [1] - The company has strong brand recognition with products like Pepperidge Farm, Cape Cod, and V8, but has been facing challenges from market bears for years [1] - Jim Cramer suggests that the high yield may only be justifiable if investors are anticipating a takeover, which has not been a reliable bet so far [1] Group 2 - Campbell's Company manufactures a variety of food products, including soups, broths, sauces, juices, frozen meals, and snacks [2] - Cramer noted that while Campbell's and General Mills both yield nearly 5%, they may not be as strong as competitors like PepsiCo, but they are still in the same league [2] - The current market conditions suggest that while high-flying stocks have peaked, companies with solid dividends like Campbell's may present temporary trading opportunities rather than long-term investments [2]

Core Viewpoint - The significant decline in stock prices of Conagra Brands and Campbell's Company presents a potential buying opportunity for patient investors despite the challenges faced by the packaged food industry [3][20]. Industry Overview - The packaged food industry is experiencing a severe slowdown due to pullbacks in consumer spending and inflation, which have particularly impacted packaged food companies [5]. - A shift in consumer behavior towards healthier options poses a significant challenge for the industry, especially for companies focused on frozen and processed meals [6]. Company Performance - Conagra and Campbell's stocks have both dropped over 25% year to date, reaching their lowest levels in over a decade, resulting in dividend yields of 6.8% and 5.1%, respectively [1][2][16]. - Both companies have faced difficulties due to poor acquisition decisions, with Conagra's acquisition of Pinnacle Foods for $10.9 billion and Campbell's acquisition of Snyder's-Lance for $6.1 billion being particularly criticized [11][12][13]. Financial Metrics - Conagra's free cash flow (FCF) per share is $3.02, while its dividend per share is $1.40; Campbell's FCF per share is $2.41 against a dividend of $1.52, indicating that both companies can support their dividends despite weakening balance sheets [18]. - In terms of valuations, Campbell's has a price-to-FCF ratio of 12.8 and a forward price-to-earnings (P/E) ratio of 10.5, while Conagra has a price-to-FCF ratio of 6.8 and a forward P/E of 8.3, showing that both stocks are significantly discounted compared to their historical averages [19]. Regulatory Environment - Regulatory pressures, such as the U.S. Department of Health and Human Services' measures to phase out synthetic dyes, add to the challenges faced by the industry but could lead to long-term benefits [7][9]. - Conagra announced plans to remove synthetic colors from its U.S. frozen product portfolio by the end of 2025, aligning with industry trends towards healthier ingredients [8].