Be Wary of This S&P 500 Stock After Lamb Weston's Surprise Index Drop

Last month, Lamb Weston (NYSE: LW) became a cautionary tale. On March 22, 2026, the murphy products shaper was removed from the S&P 500 and moved to the S&P SmallCap 600, a demotion driven by years of banal declines, brushed edifice traffic, and a marketplace capitalization that nary longer belonged successful the aforesaid country arsenic the index's different 499 members. It was a slow-motion autumn that investors could spot coming.

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That's however these things go. S&P 500 demotions seldom hap overnight. They hap aft months of guidance cuts, measurement pressure, and stock terms erosion that softly propulsion a institution beneath the floor.

The Lamb Weston communicative matters not due to the fact that of what it means for Lamb Weston, but due to the fact that different S&P 500 user sanction is tracking a disturbingly akin way close now.

Campbell's (NASDAQ: CPB) joined the S&P 500 astatine its founding successful 1957, 1 of astir 50 archetypal members inactive connected the scale today. That benignant of longevity feels imperishable close up until the infinitesimal it isn't.

In March, Campbell's reported fiscal second-quarter 2026 adjusted net per stock (EPS) of $0.51, missing the $0.57 estimation by 11%, portion nett income dropped 5% to $2.56 billion. Management chopped full-year guidance to adjusted EPS of $2.15 to $2.25 -- down from arsenic precocious arsenic $2.55 astatine the commencement of the fiscal twelvemonth -- and projected integrated nett income to diminution 1% to 2%. Tariff vulnerability is compressing gross margins by an estimated 230 ground points.

The snacks division, which Campbell's acquired Sovos Brands a mates of years agone to physique out, is struggling. Snacks' operating net fell to $67 cardinal connected $914 cardinal successful revenue, a 7.3% operating borderline that is good beneath what the institution needs to warrant that acquisition.

The banal terms has fallen much than 40% implicit the past 12 months, putting its marketplace headdress astatine astir $6.9 billion, the second-lowest successful the S&P 500. For context, 4 companies were removed from the S&P 500 successful the aforesaid rebalance that added caller members conscionable weeks earlier Campbell's guidance cut, specifically due to the fact that they ranked among the index's smallest constituents.

Campbell's is present successful that conversation. A institution that has paid a dividend each twelvemonth since 1902 doesn't request to beryllium loved by investors to enactment successful the index, but it does request to halt shrinking.