For his second "Executive Decision" segment of Mad Money Wednesday night, Jim Cramer spoke with Mark Clouse, president and CEO of Campbell Soup (CPB) , on the heels of the company's annual investor day.
Clouse said despite the many short-term challenges, he feels great about Campbell's position for future growth. He said the company is on a solid foundation and expects 6% to 8% growth next year. This year was all about meeting demand, he said, but 2022 will be all about innovation and growth.
When asked about Campbell's acquisition of Snyder's of Hanover, Clouse said that he's very confident about their snacking portfolio, which now accounts for 50% of sales. Campbell is following consumer trends and has a clear roadmap for increasing sales and gross margins.
Finally, turning to Federal Reserve news, Clouse said that inflation is a significant issue that needs to be addressed. Some of the inflation that Campbell is seeing is transitory, he said, but other areas appear to be more structural and will need to be addressed over the long term.
Let's see if a rally in the price of CBP is transitory or structural.
In the updated daily bar chart of CBP, below, we can see that the shares found buying interest (support) around $40. You can see three dips to that area since late August. Prices have firmed above the 50-day moving average line and now the slope of the line has turned positive. The 200-day moving average line is just above the market and starting to bottom.
The On-Balance-Volume (OBV) line shows some bottoming action and has started to improve this month. The Moving Average Convergence Divergence (MACD) oscillator has recently crossed above the zero line for an outright buy signal.
In the weekly Japanese candlestick chart of CPB, below, we can see the past three years of price history. CPB "rolled over" in 2020 and declined into late 2021.
Prices are still below the declining 40-week moving average line but the OBV line has been improving and the MACD oscillator has signaled a cover shorts, buy signal.
In this daily Point and Figure chart of CPB, below, we can see a possible upside price objective in the $48 area.
In this weekly Point and Figure chart of CPB, below, we see a $51 price target.
Bottom-line strategy: CPB has found support around $40 so a stop below $40 is our risk. Traders could go long CPB near $43. The $48-$51 area is our price target for now. Strength above $53 will be very bullish.