Analyst Robert Dickerson of Jefferies maintained a Hold rating on Campbell Soup (CPB – Research Report), retaining the price target of $44.00.
Robert Dickerson has given his Hold rating due to a combination of factors that suggest a nuanced outlook for Campbell Soup Company. The anticipation of CPB’s fiscal third-quarter report, which will include the recent acquisition of Sovos, plays a significant role in this assessment. Despite the addition of Sovos, retail sales have shown a slight decline excluding the acquisition, with a decrease of about 2% in the last twelve weeks ending April 20th. This dip in sales reflects a year-over-year decline in both of Campbell Soup’s segments.
Furthermore, while there has been a modest sequential improvement in the Meals & Beverages two-year stack volumes, the Snacks segment has experienced a low single-digit percentage decrease in volumes since the summer of 2023. Dickerson’s analysis suggests that while the Sovos acquisition is expected to be dilutive or neutral to the company’s earnings per share in fiscal years 2024 and 2025, it could become approximately 2.5% accretive by 2026. In addition, an upcoming Investor Day could serve as a potential catalyst for the company. These mixed signals likely contribute to the Hold rating, suggesting that while there are positive aspects on the horizon, current performance indicators advise caution.
In another report released yesterday, Bernstein also upgraded the stock to a Hold with a $46.00 price target.
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Campbell Soup (CPB) Company Description:
Campbell Soup Co. operates two segments. Meals & Beverages includes the retail and foodservice businesses in the U.S. and Canada. The segment includes the following products: Campbell’s condensed and ready-to-serve soups; Swanson broth and stocks; Pacific Foods broth, soups and non-dairy beverages; Prego pasta sauces; Pace Mexican sauces; Campbell’s gravies, pasta, beans and dinner sauces; Swanson canned poultry; Plum baby food and snacks; V8 juices and beverages; and, Campbell’s tomato juice.
Snacks includes Pepperidge Farm cookies, crackers, fresh bakery and frozen products in U.S. retail, including Milano cookies and Goldfish crackers, as well as Snyder’s of Hanover pretzels, Lance sandwich crackers, Cape Cod and Kettle Brand potato chips, Late July snacks, Snack Factory Pretzel Crisps, Pop Secret popcorn, Emerald nuts, and other snacking products in the U.S. and Canada. Beginning in fiscal 2020, the segment also includes the retail business in Latin America.
The company was founded on November 23, 1922 and is headquartered in Camden, NJ. Campbell was founded in 1869.
