Markets
CPB

Campbell Soup reports fiscal Q2 earnings February 17

What's Happening

Consumer goods maker Campbell Soup will announce its second-quarter results on February 17. The company will report its quarterly results before the market open, with the consensus calling for earnings of $0.88 per share on revenue of $2.22 billion. The stock is currently up 4.9% on the year.

Technical Analysis

CPB was recently trading at $63.59, down $4.30 from its 12-month high and $11.01 above its 12-month low. Overall technical indicators for CPB are bullish with a strong upward trend. The stock has recent support above $61.90, and resistance below $64.25. Of the 12 analysts who cover the stock, one rates it a "strong buy", nine rate it a "hold", and two rate it a "strong sell". The stock receives S&P Capital IQ's 3 STARS "Hold" ranking.

Analyst's Thoughts

CPB is in the midst of a nice rally after enduring a long sell off during the latter part of 2016, and if the company is able to post solid quarterly numbers the stock should build on its recent gains. With the recent rally in the stock, valuation is becoming a concern, with a P/E of 29.8. Analysts see the company growing earnings by a modest 4.8% this year, which is a bit low to warrant the stock's current valuation. The street has a whisper number of 89 cents, a penny above the consensus, indicating a good likelihood that the company will report earnings that are at least in-line with the consensus. The stock has been trending higher since the company's last earnings report in November, but the stock will quickly give back some of its recent gains if Q2 numbers fail to impress the street. Analysts have an average price target of $59.33 on the stock (versus its current price of $63.59), so there is some downside risk. Current shareholders should consider having an exit plan in place just in case results are unable to hit the street's forecast.

Stock Only Trade

Bullish Trade

If you want a bullish hedged trade on the stock, consider a May 52.50/57.50 bull-put credit spread for a 25-cent credit. That's a potential 5.3% return (19.6% annualized*) and the stock would have to fall 9.2% to cause a problem.

Bearish Trade

If you want to take a bearish stance on the stock at this time, consider a May 70/75 bear-call credit spread for a 25-cent credit. That's a potential 5.3% return (19.6% annualized*) and the stock would have to rise 10.5% to cause a problem.

Covered Call Trade

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Originally published on InvestorsObserver.com


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

CPB

Other Topics

Options