Morgan Stanley Is 'Cautious' On Campbell Soup's Long-Term Growth Prospects

  • Morgan Stanley analyst Pamela Kaufman reiterated an Equal-Weight rating on the shares of Campbell Soup Co CPB with a price target of $48.00.
  • The analyst listed key takeaways from a meeting with the company's management.
  • Kaufman noted the management was optimistic about the FY23 outlook as the company benefitted from below-historical levels of elasticity, and is well-positioned to benefit from consumers increasingly seeking value and innovation efforts.
  • She added that CPB believes it is in an advantaged position when consumers are under economic pressure, given its category exposure.
  • Also ReadCampbell Soup Manages Q4 Top-Line Beat; Notes Margin Pressure
  • The analyst believes Campbell's near-term outlook is supported by resilient consumer demand for packaged food while moderating inflation, combined with price realization, should help improving margins.
  • Meanwhile, the analyst is cautious about CPB's long-term growth prospects, the sustainability of demand for key categories, and its ability to deliver on Snacks' margin improvement.
  • During Q4 FY22, the company saw softer shipments in Snacks as it implemented a price increase in June. Given the stabilization in July, management expects to see Q1 outperforming consumption by a couple hundred bps as the company continued to rebuild inventories.
  • Price Action: CPB shares are trading higher by 2.78% at $49.10 on the last check Wednesday.
  • Photo Via Company
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