Is Campbell Stock a Buy?
It's enticing, to be sure. Food company Campbell Soup (NYSE: CPB) is a key beneficiary of coronavirus lockdowns that still have most restaurants only half-open. Meanwhile, should those lockdowns lead into a job-killing recession, eating inexpensive food at home will remain a necessary choice for many consumers. It seems Campbell can't lose. Jefferies' analysts even said as much a few days ago when they recommended Campbell and rival Conagra after finding most consumers plan to eat at home more even after COVID-19 is in the rearview mirror.
This is one of those cases, however, where the underlying story is right but the timing is all wrong.
Like most of its consumer goods peers, Campbell Soup ran into the perfect storm in 2017. The industry's pricing power was waning, but its costs remained firm. Shipping expenses and other logistics were chewing away at already-thin margins.
Source Fool.com
