Business

Top analysts cut Campbell's stock target amid major challenges

By Peace Longe TheStreet

Updated June 9, 2026 1:50 PM

Campbell's (CPB) has long been a stock valued for steady returns over fast gains.

Demand for the company's products, such as soups and snacks like Goldfish crackers, holds up during recessions, and that steady sales record made the company a staple in defensive portfolios.

So, when five Wall Street analysts move on the stock within a single week, it is worth paying attention.

The analysts cut their targets right before Campbell's earnings, and the report that followed reveals what those analysts were worried about.

Why Wall Street trimmed its Campbell's stock price targets

Between June 1 and June 5, four firms lowered their Campbell's price targets and a fifth held a cautious stance, according to Benzinga.

Morgan Stanley's Megan Alexander kept an equal-weight rating and cut her target to $21 from $23.

Bernstein's Alexia Howard went further, downgrading the stock to underperform from market perform and lowering her target to $19 from $21.

More Wall Street Resets:

UBS analyst Peter Grom held a sell rating and trimmed his target to $19 from $20, while Evercore ISI's David Palmer lowered his target to $24 from $26 and kept an in-line rating.

The most recent coverage came in April, when BTIG's Rob Dickerson initiated coverage on the stock at neutral.

Stack those numbers up, and a clear message emerges.

The most bullish target in the group, Palmer's $24, sits only modestly above where the stock trades today.

Campbell's faces pressure on its snacks margins and rising tariff costs in 2026. Nagle/Bloomberg via Getty Images

The median target across the wider analyst group sits at about $20.50, according to Quiver Quantitative, below the recent share price.

What Campbell's third-quarter earnings revealed about the squeeze

When Campbell's posted its third-quarter fiscal 2026 report on June 8, the results showed why analysts were cautious.

Adjusted earnings came in at 50 cents per share, a penny ahead of estimates but down 32% from a year earlier, and net sales fell 4% to $2.4 billion, the company confirmed.

Adjusted gross margin also contracted 240 basis points to 27.7%, with tariffs alone adding 310 basis points of cost pressure.

A basis point is one-hundredth of a percentage point, so 310 of them takes a meaningful bite out of Campbell's profit.

In addition, U.S. soup consumption dropped 4.4% in the quarter, yet Rao's, the premium pasta sauce brand, posted 15% growth in consumption, a sign that shoppers are still willing to pay up for products they love.

How tariffs and food inflation are reshaping Campbell's outlook

Management warned that input-cost inflation could reach 5% to 6% next fiscal year if current oil prices and supply-chain disruptions hold, according to the earnings call transcript on The Motley Fool.

Snacks remain the weakest spot in Campbell's business right now.

The margin of the snacks segment was roughly 400 basis points below last year's, a gap the chief financial officer called "not acceptable," according to Benzinga, and the company expects pressure on salty snacks to linger.

This is a problem because food stocks like Campbell's usually hold up well when the rest of the market falls.

Investors tend to buy them for safety during turbulent periods, but that purpose is defeated if they can't be counted on to remain stable.

In that context, it is worth noting that Campbell's stock is down roughly 38% over the past year, sitting at $21.49 against a 52-week high of $34.44.

What the high dividend yield signals for Campbell's investors

Campbell's pays a quarterly dividend of 39 cents per share, yielding about 7.3% at the current price.

That number looks high, but this is mainly because the stock has fallen close to its 52-week low of $19.56, and a rising yield on a sliding stock could be a warning sign.

Management was blunt on the June 8 earnings call, saying it has no intention of raising dividends soon, as it prioritizes debt reduction.

For income investors, that means while the current payout rate is secure, the chance of a higher dividend is off the table for now.

Three things to watch before betting on Campbell's

Snacks margins stop falling and begin to stabilize.
Tariff costs ease or get absorbed without crushing demand.
Soup volumes recover once tough year-over-year comparisons fade.

What still needs to happen to restore investor confidence in Campbell's

Campbell's reaffirmed its full-year fiscal 2026 guidance, which suggests management still believes the year will land as promised.

However, next year poses the tougher question.

Until tariffs cool and the snacks business steadies, the signals that worried analysts remain in place.

For now, the safest approach is to wait, as investors collect dividends while holding the stock and hoping for better conditions on tariffs and inflation.

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This story was originally published June 9, 2026 at 1:37 PM.