Please ensure Javascript is enabled for purposes of website accessibility

Why Campbell Soup Stock Rose 2.3% in March

By Keith Noonan – Apr 5, 2020 at 4:22PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A big earnings beat and heightened demand for some of its core products are helping the food company outperform the market.

What happened

Shares of Campbell Soup (CPB -1.18%) climbed 2.3% in March, according to data from S&P Global Market Intelligence . The stock rose early in the month following the release of the company's second-quarter results and proved resilient despite a substantial sell-off for the broader market. 

^SPX Chart

^SPX data by YCharts

Global markets suffered in March as concerns about the novel coronavirus pandemic weighed on stock prices, but Campbell Soup's solid earnings results and relatively crisis-resistant product offerings have helped the company's share price hold up despite the pressures. While the S&P 500 index's level has slid roughly 23% year to date, Campbell's stock is roughly flat across the stretch.

A shopping cart in a grocery aisle.

Image source: Getty Images.

So what

Campbell Soup reported second-quarter earnings results before the market opened on March 4, delivering sales and earnings results that topped analyst expectations. Revenue for the quarter dipped roughly 1% year over year to come in at $2.16 billion and beat the average analyst target for sales of $2.15 billion. Non-GAAP (adjusted) earnings per share for the period were $0.72, up 11% year over year and significantly ahead of the average analyst target for per-share earnings of $0.66.

Campbell Soup also paired its second-quarter results with a raised guidance for its full-year adjusted earnings per share. With the coronavirus pandemic causing people to stock up on consumer staples for riding out isolation periods, non-perishable food products are suddenly a hot category seeing increased demand. 

Now what

Campbell's stock has continued to climb in April's tradings despite negative momentum for the broader market. The company's share price is up roughly 7% in the month's trading so far. 

^SPX Chart

^SPX data by YCharts

Net sales and organic sales for the full year are expected to fall between a 1% decline and a 1% gain year over year. The company raised its full-year adjusted earnings per share target to between $2.55 and $2.60 per share, representing growth between 11% and 13% year over year and up from its previous target for per-share earnings between $2.50 and $2.60 per share.

Campbell Soup's stock trades at roughly 10 times this year's expected earnings and has a dividend yield of roughly 2.8%.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Campbell Soup Company Stock Quote
Campbell Soup Company
$48.60 (-1.18%) $0.58

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.