Campbell Soup Stock Hits Annual Low on Downgrade

The majority of analysts were bearish coming into today

Deputy Editor
Aug 25, 2021 at 10:42 AM
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The shares of Campbell Soup Co (NYSE:CPB) are down 1.4% to trade at $41.45 at last check, after earlier dropping to an annual low of $41.20, following a downgrade from Piper Sandler from "neutral" to "overweight," with a price-target cut to $43 from $51. The analyst in question cited higher steel prices, which could affect the price of cans.

Today's drop has CPB extending last session's trough, and slipping even further below pressure at the 30-day moving average. Year-to-date, the equity is down roughly 14%. 

The brokerage bunch was already mostly bearish coming into today, with seven of the eight analysts in coverage carrying a "hold" or worse rating. Meanwhile, the 16.06 million shares sold short account for 7.9% of the stock's available float. It would take over six days to buy back these bearish bets, at Campbell Soup stock's average pace of trading. 

The options pits echo that pessimism. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio sits higher than 81% of readings from the past year. This means traders have rarely been more put-biased.

It's also worth noting that CPB ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 19 out of 100. In other words, the security has consistently realized lower volatility than the options pits have priced in, making the equity a potential premium-selling candidate.


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