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On Monday, Morgan Stanley (NYSE:MS) initiated coverage on Campbell Soup (NYSE:CPB) shares (NASDAQ:CPB) with an Equalweight rating and set a price target of $40.00. The firm highlighted the company’s portfolio transformation as a key factor that could lead to an improved long-term growth outlook. This positive perspective is supported by Campbell’s strong snacks portfolio and the momentum of the recently acquired Rao’s brand. The company, currently trading at $38.08 and sporting a market capitalization of $11.35 billion, has demonstrated its commitment to shareholder returns with a 55-year track record of consecutive dividend payments.InvestingPro analysis indicates the stock is currently trading near its 52-week low of $36.92, potentially presenting an opportunity for value investors. Additional ProTips and comprehensive analysis are available with an InvestingPro subscription.
The research firm’s commentary pointed out the enhanced visibility for Campbell Soup’s future growth, attributing it to strategic moves in the company’s product lineup. Despite the optimistic long-term view, Morgan Stanley expressed caution in the short term. The firm cited ongoing challenges within Campbell Soup’s snacking categories, emphasizing that the timing of a recovery remains uncertain. Recent financial data shows revenue growth of 9.15% in the last twelve months, though 15 analysts have revised their earnings expectations downward for the upcoming period.
The new price target of $40.00 suggests Morgan Stanley’s analysts have factored in both the potential and the hurdles faced by Campbell Soup. The Equalweight rating indicates that the analysts believe the stock is adequately valued at its current price when considering the risks and opportunities ahead.
The company’s shares are now being closely watched by investors following this new coverage. Morgan Stanley’s assessment provides a balanced view of Campbell Soup’s current position in the market, acknowledging the company’s efforts to reshape its portfolio while also recognizing existing industry challenges.
Campbell Soup will continue to operate in a competitive environment, with investor expectations now set against the backdrop of Morgan Stanley’s analysis. The company’s future performance in its snacking divisions, as well as the integration and growth of the Rao’s brand, will be key factors in realizing the growth outlook projected by the firm.
In other recent news, Campbell Soup has reported mixed financial results for its second fiscal quarter of 2025. The company exceeded earnings expectations, largely due to reduced marketing and selling expenses, but fell short on revenue, prompting a downgrade in its full-year guidance. This revision reflects challenges in the Snacks segment, with TD Cowen reducing its price target from $44 to $36 and maintaining a Hold rating. Similarly, RBC Capital Markets adjusted its price target to $44 from $51, citing underperformance in the Snacks division and maintaining a Sector Perform rating.
DA Davidson also revised its price target for Campbell Soup, lowering it to $39 from $46, while maintaining a Neutral stance. Analyst Brian Holland noted the difficulties in the broader food industry and specific hurdles for Campbell Soup, including a delay in reaching its operating margin target. Despite some stabilization in the Meals & Beverages segment, the Snacks division continues to struggle, impacting the company’s financial outlook. The firm’s cautious approach reflects the complex market conditions and potential external factors like tariffs that add to the unpredictability.
These developments indicate a challenging environment for Campbell Soup, with analysts expressing a wait-and-see attitude as the company navigates through these uncertain times.
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