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RBC Capital maintained its Sector Perform rating on Campbell Soup (NASDAQ:CPB) with a steady price target of $47.00. The firm anticipates that Campbell Soup's fiscal fourth-quarter results will continue to face challenges similar to those seen in the previous quarter, particularly in the Snacks division.
Campbell Soup's upcoming fiscal year 2025 outlook is expected to draw significant attention from investors, who will be looking for management to provide a positive forecast to support the stock's recent strong performance. However, RBC Capital holds a cautious stance on the sector.
Despite the broader industry concerns, RBC Capital considers the Sovos Brands portfolio to be a critical component of Campbell Soup's growth strategy. The portfolio is expected to be a key topic at the company's investor day in September. During this event, management is slated to disclose long-term financial targets that include the impact of the Sovos Brands acquisition.
The firm's commentary suggests that while there are headwinds affecting the company, the integration and performance of the Sovos Brands acquisition are pivotal to Campbell Soup's future growth prospects.
Campbell Soup Company (NYSE:CPB) finalized the sale of its Pop Secret popcorn business to Our Home, a company specializing in better-for-you snacks. The sale is expected to reduce Campbell's earnings per share for fiscal 2025 by about $0.04. Meanwhile, Evercore ISI maintained its In Line rating for Campbell Soup, expecting the company's fiscal fourth-quarter earnings to align with expectations.
TD Cowen raised Campbell Soup's stock target from $46.00 to $47.00 while maintaining a Hold rating, reflecting the company's recent acquisition of Sovos Brands.
Deutsche Bank also held its rating at Hold, while JPMorgan upgraded Campbell Soup to Overweight, increasing the price target to $52.00. Campbell Soup has made strategic investments to optimize its supply chain and reduce costs, including a $230 million investment and a reduction of 415 roles over two years.
The company anticipates a recovery in the first half of fiscal 2025, with adjusted EBIT growth projected to be around 6.5% to 7% for the full year, and adjusted EPS growth of about 2% to 3%.
InvestingPro Insights
As Campbell Soup (NASDAQ:CPB) approaches its fiscal year 2025 outlook announcement, investors are keeping a keen eye on the company's performance metrics. According to InvestingPro data, Campbell Soup boasts a market capitalization of $15.06 billion and a P/E ratio of 20.24, reflecting investor confidence in its earnings potential. Notably, the company has demonstrated a commitment to shareholder returns by maintaining dividend payments for 54 consecutive years, a testament to its financial stability and a factor that may reassure investors about its long-term prospects.
In the context of the company's recent performance, Campbell Soup has been trading near its 52-week high, with a price that is 98.92% of this peak. This robust market performance is supported by a steady gross profit margin of 31.74% over the last twelve months as of Q1 2023. Additionally, InvestingPro Tips highlight that analysts predict the company will be profitable this year, which aligns with the positive sentiment reflected in the stock's year-to-date price total return of 19.61%. For investors seeking more in-depth analysis, there are additional InvestingPro Tips available that delve into the company's financial nuances.
As RBC Capital maintains a watchful eye on the sector and Campbell Soup's strategic moves, these financial metrics and insights from InvestingPro serve to provide a broader context for evaluating the company's stock and its future growth trajectory.
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