Unusual Options Activity in Campbell’s Stock Is a Big Warning on Bearish Investor Sentiment

The Campbell’s Company (CPB) reported Q4 2026 results this morning before the markets opened. Despite meeting Wall Street’s revenue and earnings per share estimates, the packaged food company’s shares, as I write this midday Thursday, are down by more than 10%. 

If today’s decline holds, Campbell’s stock will be down over 25% year-to-date, 34% in the past 52 weeks, and 54% over the past five years. As a result of the implosion, CPN stock is down 67% from its July 1, 2016, all-time high of $67.89.

The company’s management has clearly lost investors' trust. It’s hard to imagine them regaining it.  

If you were paying attention to the company’s options activity on Tuesday, you would have had a good idea of investor sentiment heading into today’s earnings report.

CPB’s options volume yesterday was 48,701, 6.3 times its 30-day average; more importantly, puts outnumbered calls 35,585 to 14,116. 

As for its unusual options activity, it had three that made the cut—options expiring in six days or more, options volume of 500 or more, and open interest of 100 or more—and all were puts.

They scream bearish investor sentiment, something one particular institution used to its advantage. Here’s how. 

The CPB Options in Question

 

The Sept. 18 $22.50 put strike had the 9th-highest Vol/OI (volume-to-open-interest) ratio yesterday at 26.37. While the Oct. 16 $22 put had unusually active options activity, I’m interested in the two expiring in a little over two weeks. Together, the $22.50 and $21 puts accounted for 31% of the day's volume, and double the stock’s 30-day average. 

Of the 15,180 in volume for the two puts, two trades at 12:21 p.m. ET accounted for 98.8% of the volume. That points to an institution implementing an options strategy to benefit from Campbell’s lack of bullish sentiment. 

But before I get into the options strategy utilized, I want to reflect on how Campbell’s got here. 

The Demise Wasn’t Just About Healthy Eating

It’s easy to blame Campbell’s demise on people opting for healthier food options. That clearly hasn’t helped, but the company has been on a steady decline for many years. 

A major accelerant was the company’s purchase of Snyder’s-Lance for $6.1 billion in March 2018. The acquisition of the snack food company boosted Campbell’s overall snack food revenue from 31% to 46%. Unfortunately, it also boosted the company’s debt by $5.8 billion to $8.08 billion as of April 29, 2018. 

As of Q4 2026, it’s lower, at $6.16 billion, but that represents a high 87% of its market cap. Before the acquisition, its debt accounted for just 17% of its market cap. More importantly, Campbell’s pays nearly three times as much annual interest as it did in 2018. 

It’s another example of a “transformational” acquisition that did none of that. 

In April 2025, I compared CPB with General Mills (GIS) after they both hit new 52-week lows. I concluded that GIS was the better buy, in part because of its pet care business. It has also performed miserably since, down 31% over the past 16 months.

In my defense, I suggested betting on GIS by buying a Jan. 15/2027 $55 call for a net debit of $790, or 14.4% of the strike price. While unlikely, its share price still has 4.5 months to recover. But I digress.

The packaged food company consolidation has been a disaster. CPB and GIS are proof positive. 

Back to the Campbell’s Options Strategy in Play

  

As I mentioned earlier, these two trades accounted for nearly all of the volume yesterday for the Sept. 18 $21 and $22.50 puts. The trade sizes of 5,000 and 10,000 points to a 1x2 Put Ratio Spread, which involved the institution buying 5,000 long $22.50 puts for $185,000 and selling 10,000 short $21 puts for $50,000 in premium income, a net debit of $135,000, or $0.27 per share.

The bearish bet generates a maximum profit of $615,000 if CPB’s share price at the Sept. 18 expiration is $21. That’s because the two short $21 puts expire worthless, while the one long $22.50 put is worth $1.50 per share less the $0.27 per share net debit [5,000 contracts * 100 * 1.23 per share profit]. That’s a 455.6% return [$615,000 - $135,000 / $135,000], or 10,393.4% annualized [455.6% * 365 / 16 DTE].

The maximum loss on the upside -- if the share price is above $22.50 at expiration and all of the puts expire worthless -- is the net debit of $135,000. On the downside, it’s unlimited. For example, if the share price at expiration is $18, the loss is $885,000, which includes the $135,000 net debit and $775,000 from the net settlement of puts at expiration [(10,000 contracts * 100 * $21 strike price - $18 share price) - (5,000 contracts * 100 * $22.50 strike price - $18 share price)].

The downside breakeven share price on this trade is $19.77 [$21 strike price - $1.23 per share maximum profit]. The institution starts losing money below that. Theoretically, the share price could go to $0, but it is highly unlikely, even for Campbell’s.  

At $21.40 as I write this, the institution’s bet is 40 cents away from maximum profit. With a $19.77 breakeven, I like its odds of making money on the trade.  

On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.