Campbell Soup CompanyCPBNASDAQ

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $84.98 per share(market-calibrated)

+222.9%

Upside to Fair Value

Current

$26.32

Pure Model

$94.04

Fair Value

$84.98

Bull Case

$106.37

Bear Case

$84.92

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

0.50%

Calibrated Growth

1.80%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $94.04.

What's Driving This Ratingfor CPB

↓

CapEx normalizing toward maintenance

Historical CapEx is 3.57% of revenue (heavy investment phase). Model fades this to 3.00% by Year 10, freeing up ~$65M in annual FCF. This is the biggest driver of long-term cash flow improvement.

↑

Margin expansion modeled

Current EBIT margin is 13.49% — below the sector mature average of 16.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $1.7B (15.18% margin).

→

Moderate revenue growth

Analyst consensus projects -3.45% revenue growth, fading to 2.50% by Year 10. Revenue reaches $11.4B (vs $10.3B today).

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 200bps below the model's 2.50%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 64.43% indicates efficient cash generation. FCF reaches $1.4B by Year 10 (12.15% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)-0.04

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)4.34%

Cost of Debt

Pre-tax Cost of Debt3.28%

Tax Rate24.37%

After-tax Cost of Debt2.48%

Equity Weight (E/V)52.10%

Debt Weight (D/V)47.90%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (52.10% × 4.34%) + (47.90% × 2.48%)

= 5.50%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$9.9B	$10.1B	$10.4B	$10.7B	$11.4B
EBIT	$1.3B	$1.4B	$1.4B	$1.5B	$1.7B
Tax	$326M	$332M	$342M	$375M	$422M
NOPAT	$1.0B	$1.0B	$1.1B	$1.2B	$1.3B
+ Depreciation	$364M	$371M	$383M	$393M	$420M
- Capex	$353M	$348M	$345M	$341M	$342M
- Δ NWC	-$1M	$367,617.42	$308,514.982	$559,942.183	$979,781.481
Free Cash Flow	$1.0B	$1.1B	$1.1B	$1.2B	$1.4B
Discount Factor	0.948	0.852	0.765	0.687	0.585
Present Value	$969M	$897M	$842M	$836M	$811M

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$1.4B

Terminal Growth Rate2.50%

WACC5.50%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$47.4B

PV of Terminal Value$27.7B

Exit Multiple Method

Year 10 EBITDA$2.2B

Exit Multiple (EV/EBITDA)20.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$43.0B

PV of Terminal Value$25.2B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$8.7B

PV of Terminal Value$27.7B

Enterprise Value$36.4B

(-) Net Debt$7.1B

Equity Value$29.3B

Shares Outstanding298M

Price per Share$98.30

Exit Multiple Method

PV of Projected FCFs$8.7B

PV of Terminal Value$25.2B

Enterprise Value$33.8B

(-) Net Debt$7.1B

Equity Value$26.8B

Shares Outstanding298M

Price per Share$89.79

Pure Model Fair Value

$94.04

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
3.50%	$143.28	$136.49	$130.02	$123.85	$117.98
4.50%	$103.94	$114.37	$130.02	$123.85	$117.98
5.50%	$82.07	$87.20	$94.04	$103.62	$117.98
6.50%	$67.46	$70.39	$74.05	$78.76	$85.05
7.50%	$56.65	$58.48	$60.69	$63.38	$66.75

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$84.92

222.6% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: -0.04

Base Case

$94.04

257.3% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: -0.04

Bull Case

$106.37

304.1% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 0.30

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Consumer Defensive Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth-3.45%

Year 3 Revenue Growth1.04%

Year 5 Revenue Growth0.85%

Year 7 Revenue Growth1.51%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin13.49%

Terminal EBIT Margin16.00%

Tax Rate24.37%

Historical Capex / Rev3.57%

Terminal Capex / Rev3.00%

NWC / Revenue0.35%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 20x EV/EBITDA (Consumer Defensive sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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