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RBC Capital Affirms Campbell Soup (CPB) at 'sector Perform'; 'High Food Value' Assets Remain Key to Growth Strategy

June 9, 2015 11:23 AM EDT
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RBC Capital affirms Campbell Soup Company (NYSE: CPB) at Sector Perform following news that the company is moving to acquire Garden Fresh Gourmet for $231 million.

Analyst David Palmer commented, While the biggest change in at-home eating has been a shift to "perimeter of the supermarket" (e.g. meats, dairy, produce), it is also true that small brands have been gaining share from big brands in the center-store. In recent years, Campbell has acquired smaller brands (Bolthouse Farms, Plum, Kelsen) in order to grow its presence in the perimeter of the supermarket and in faster growing categories. The scale and generally lower margins of these businesses may mean that a significant positive impact is years away. However, the collection of growthier "high food value" assets is one element of a successful strategy, in our view. We will be looking to learn more about Garden Fresh Gourmet, along with Campbell's plans to renew gross profit growth at its July investor day.

For an analyst ratings summary and ratings history on Campbell Soup click here. For more ratings news on Campbell Soup click here.



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