Campbell’s Stock Looks Undervalued, Ready to Move Up?
Here is why we think Campbell’s (CPB) stock deserves consideration as a value stock. It is currently trading nearly 33% below its 1 year high, and also trading at a PS multiple which is below the average for the last 3 years. However, it has reasonable revenue growth and strong margins to go with its modest valuation.
- Reasonable Revenue Growth: 6.4% LTM and 6.2% last 3 year average.
- Strong Margin: Nearly 13.3% 3-year average operating margin.
- No Major Margin Shock: Campbell’s has avoided any large margin collapse in the last 12 months.
- Modest Valuation: Despite encouraging fundamentals, CPB stock trades at a PE multiple of 14.7
As a quick background, Campbell’s provides food and beverage products, including retail and foodservice meals, snacks like cookies and crackers, serving markets in the U.S. and Canada internationally.
Markets reward quality over time, and that’s what High Quality Portfolio captures.
| CPB | S&P Median | |
|---|---|---|
| Sector | Consumer Staples | – |
| Industry | Packaged Foods & Meats | – |
| PE Ratio | 14.7 | 23.7 |
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| LTM* Revenue Growth | 6.4% | 5.6% |
| 3Y Average Annual Revenue Growth | 6.2% | 5.3% |
| LTM Operating Margin Change | 0.5% | 0.2% |
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| LTM* Operating Margin | 13.2% | 18.8% |
| 3Y Average Operating Margin | 13.3% | 18.2% |
| LTM* Free Cash Flow Margin | 6.9% | 13.4% |
*LTM: Last Twelve Months
But do these numbers tell the full story? Read Buy or Sell CPB Stock to see if Campbell’s still has an edge that holds up under the hood.
Stocks Like These Can Outperform. Here Is Data
Below are statistics for stocks with same selection strategy applied between 12/31/2016 and 6/30/2025.
- Average 6-month and 12-month forward returns of 12.7% and 25.8% respectively
- Win rate (percentage of picks returning positive) of > 70% for both 6-month and 12-month periods
- Not over dependent on market crashes. During non-crash periods as well, this strategy has 12-month average return of nearly 20% with 67% win rate.
But Consider The Risk
That said, CPB isn’t immune to big drops. It fell 53.5% in the Dot-Com Bubble and nearly 38% during the Global Financial Crisis. The 2018 correction wasn’t kind either, with a 47% dip. Even the Covid pandemic and inflation shock caused pullbacks of 23% and 32%, respectively. The stock shows resilience but still takes hits when the market sells off hard.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.