Moody’s cuts Campbell’s rating on weak earnings, high leverage

Moody’s Ratings agency has downgraded The Campbell Soup Company to a Baa3 rating from Baa2, signaling weaker operating earnings and expectations of further revenue and profit declines in 2027. Additionally, the company's commercial paper rating has been lowered to Prime-3 from Prime-2, with the outlook remaining negative. The downgrade is attributed to the company's struggle to execute its turnaround plan and the impact of a 36% dividend reduction.

Campbell's leverage has also increased to 4.9x at the end of 2026, with further deterioration expected in the first quarter of 2027, despite a decline in operating performance. The acquisition of a 49% stake in La Regina supplier and the option to acquire the remaining stake has constrained the company's financial flexibility. Campbell faces challenges such as commodity and logistics inflation, as well as a new $500 million efficiency program through 2030.

Despite strong brand equity and market share in US canned soup and snacks categories, the company's elevated leverage remains a concern for credit metrics.