Morningstar

Deal With Activist Investor Good News for Campbell Soup

The wide-moat firm's agreement with Daniel Loeb and Third Point brings the months-long proxy battle to an end.

Securities In This Article
Campbell Soup Co
(CPB)

In advance of its annual shareholder meeting Nov. 29, wide-moat

We view the firm’s decision to put an end to this ordeal favorably. Because Campbell is a controlled company, with the Dorrance family (direct descendants of the man who invented the process by which wet soup is turned into condensed soup) owning about 40% of the outstanding shares and maintaining board representation, we had doubted that Loeb's pursuit would ultimately prove successful (at least to the extent he sought--replacing the entire board with a fresh slate of representation at the outset). However, we also think Campbell has already begun to take proactive steps to right the business (including its decision to sell its fresh and international operations--set to be announced by the end of the fiscal year--and extract excess costs to fund further brand investments), which we believe are prudent. As such, this announcement does little to alter our $45.50 fair value estimate or our Standard stewardship rating for Campbell.

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About the Author

Erin Lash, CFA

Sector Director
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Erin Lash, CFA, is a sector director, AM Consumer, for Morningstar*. In addition to leading the sector team, she covers packaged food and household and personal care companies. Beyond managing a team of nine analysts and associates covering an array of consumer firms, Lash also conducts fundamental analysis of 13 multi-billion-dollar market capitalization firms in the packaged food and household and personal care space.

Before joining Morningstar in 2006, Lash spent four years as an investment analyst covering retail, transportation, and technology firms for State Farm Insurance. In this capacity, Lash analyzed financial statements, business strategy, and fundamentals of owned companies and potential investments, presenting her recommendations based on this analysis to State Farm portfolio managers for ownership consideration.

Lash holds a bachelor’s degree in finance from Bradley University’s Foster College of Business. She also holds a master’s degree in business administration, with concentrations in accounting and finance, from the University of Chicago Booth School of Business. Lash has completed the Chartered Financial Analyst® designation. She ranked second in the food and tobacco industry in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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