Campbell Soup Company (CPB) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Campbell Soup Company (CPB)

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Intrinsic Value (DCF)

Current$26.90
Intrinsic$19.07
-29%
$5.60$19.07$44.68
Market implies 12% growth for 5 years
CPB trades at a premium to our conservative estimate — investors expect above-average performance.
At $27, the market prices in 12% annual cash flow growth — a moderate expectation aligned with historical trends (8%).
Range: Bear $6 → Bull $45. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →4%6%8%10%
8%$27$32$37$42
10%$12$16$19$23
12%$4$7$9$12
14%$0$1$3$5

Bull Case

  • Bull case ($45) offers 66% upside at 10% growth, 9% discount
  • Conservative 8% growth assumption is achievable based on track record

Bear Case

  • Bear case ($6) implies 79% downside at 6% growth, 12% discount
  • Price reflects 12% growth expectations vs 8% historical — high bar to clear
  • Trading 29% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection

Year 1$761.40M
Year 2$822.31M
Year 3$888.10M
Year 4$959.14M
Year 5$1.04B
Terminal$15.24B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$705.00MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

Frequently Asked Questions

Is CPB stock undervalued or overvalued?
🔴 OVERVALUED

CPB trades at $26.90 vs. our DCF-derived intrinsic value of $19.07, implying -29% downside. Using a 10.0% WACC and 8.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($34.80) suggests limited upside.

What is CPB's intrinsic value?

Using a 5-year DCF model: Base FCF of $705M, projected at 8.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $7.08B net debt and dividing by 0.30B shares: Bear $7.31 | Base $19.07 | Bull $34.80. Current price $26.90 implies -29% to base case.

How is CPB's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($12.80B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 18.2x.