By Evie Liu

Campbell's, one of the original members of the S&P 500 since 1957, could face the risk of removal at a future index reshuffle if its shares fail to rebound meaningfully. The company's earnings report, scheduled for Wednesday before the market opens, would be key in determining the stock's direction in the months ahead.

Investors aren't very upbeat for Campbell's fiscal second quarter that ended in January. Wall Street analysts polled by FactSet expect the firm's net quarterly sales to decline 2.7% from the same period last year to $2.61 billion, while earnings are expected to come at 57 cents per share, down from 74 cents a year ago.

Campbell's, known for its canned soup, food staples, and snacks, has been scrambling to meet shifting consumer preferences. In the quarter ended in November, organic net sales fell 1% from a year earlier thanks to weakness in snacks and meals. Adjusted earnings declined 13%, pressured by cost inflation and higher tariffs -- primarily on steel and aluminum used in canned foods.

Investors showed little enthusiasm for the stock. Campbell's shares have tumbled more than 40% over the past 12 months, approaching a 30-year low. As of Tuesday's trading, the stock has a market capitalization of $7.5 billion, making it the smallest company in the S&P 500 besides those removed in a reshuffle last week.

Campbell's could fall out of the market-cap-weighted index at the next reshuffle if its ranking stayed low. For passive funds tracking the index, these adjustments trigger forced selling of the removed stocks and buying of the replacements, which can amplify short-term price movements.

Campbell Soup is one of the original members of the S&P 500 when the index was officially launched in 1957. There are only about 50 companies still left from that original group due to mergers, bankruptcies and other developments.

The S&P indexes are designed to represent the largest and most liquid companies in the market. When a company's market value declines relative to peers -- often due to weak earnings, strategic missteps, or sector headwinds -- it becomes a candidate for removal during periodic reviews.

This was highlighted last Friday. Four companies -- Match Group, Molina Healthcare, Lamb Weston Holdings, and Paycom Software -- were dropped from the S&P 500. Each of the stocks were ranked among the smallest constituents in the index, replaced by fast-growing names in technology and communications infrastructure.

Campbell's stock will need a nice rally in the coming months, or it could be next on the chopping block. Despite overall challenges, the company is upbeat about its "leadership brands" like Rao's pasta sauce, which was acquired in 2024. In the latest reported quarter, Rao's posted low-single-digit dollar consumption growth, outperforming most competitors.

Management also said it's making progress on cost savings and productivity initiatives to help offset inflation while continuing to invest in its brands. The company is targeting $375 million in cost savings by fiscal 2028. Still, management expects adjusted earnings to decline 12% to 18% in fiscal 2026 compared with the prior year, largely because of tariff-related costs.

Wall Street isn't seeing a rally soon. Analysts polled by FactSet have an average 12-month price target of $28, only 12% above the stock's current level around $25.

Write to Evie Liu at evie.liu@barrons.com

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March 10, 2026 14:52 ET (18:52 GMT)

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