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Investing.com -- Piper Sandler downgraded Campbell Soup Company (NASDAQ:CPB) to Neutral from Overweight given ongoing weakness in the snacks business and rising costs from new European tariffs on Rao’s sauces.
The firm cut its fiscal 2026 earnings estimate by 14 cents to $2.39 a share and lowered its price target to $34 from $35.
While Campbell is seeing steady growth in its meals and beverages segment, led by strong sales of broth and Rao’s, Piper said the snacks category remains under pressure as consumers reduce discretionary spending.
U.S. retail sales for the snacks business are down more than 4% so far in the fourth quarter, worse than previously expected.
The brokerage also flagged higher EU tariffs on Rao’s imports, which recently rose to 15% from 10%, resulting in an estimated additional 7 cent hit to 2026 earnings.
That adds to a broader $0.39 impact from tariffs across several markets.
Campbell has yet to provide full-year guidance, but Piper noted that the company faces other near-term challenges, including the loss of revenue from the sale of Noosa yogurt, and higher advertising and compensation costs in the upcoming year.
Despite some bright spots in the portfolio, Piper said the lack of near-term catalysts and lingering headwinds make it harder to make a bullish case for the stock.