Bank of America Merrill Lynch Neutral on Campbell Soup
Bank of America Merrill Lynch is out with a research report on Campbell Soup Company (NYSE: CPB) and it has a Neutral rating and a $35 price target on shares.
In a note to clients, Bank of America Merrill Lynch writes, "CPB plans to report 1Q12 results on Tuesday, November 22nd, before the market opens. Our $0.80 EPS forecast is $0.01 above consensus. Key elements of our forecast are: 1) total sales are forecasted to increase 2.3%, with net pricing and promotions +2.6%, and FX +2.4%, more than offsetting -2.8% volumes; 2) gross margins are forecasted to increase 10 bps y/y as increased pricing and a decline promotion spending offset inflationary pressures; 3) operating margins are forecasted to decline 200 bps y/y from 20.4% to 18.4% due to increased spending on marketing and selling as the company looks to reinvigorate its brands; and 4) we forecast a share count of 322 mil, roughly a $0.04 benefit y/y. We believe the biggest risk to our estimate is volume growth, which could be weaker than expected given the increase in net pricing in US Simple Meals."
Shares of CPB gained 5 cents yesterday to close at $33.41, a gain of 0.15%.
