CPB
Campbell Soup Company
$21.00
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 50.8% below fair value
You pay
$21.00
Bear
$35.14
Fair
$42.67
Bull
$50.20
Bear
$35.14
+67.3%
$2.51 × 14x P/E
Fair
$42.67
+103.2%
$2.51 × 17x P/E
Bull
$50.20
+139.0%
$2.51 × 20x P/E
Adjust Assumptions
17.0x
2.51$
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
8.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (29 analysts)
$19.62
Divergence from AlphaVal
117%
Summary
Applying a 17x P/E to adjusted EPS of $2.51, the base-case value is $42.67 per share.
Warnings
The company's reported profits differ from official accounting profits by 92%. Check what costs are being left out of the adjusted number.
The company pays out 108% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $19.62 (from 29 analysts). Our estimate is 117% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples