UPDATE: Credit Suisse Upgrades Campbell Soup (CPB) to Neutral, But The Soup is Still Not Hot
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Price: $23.17 -0.47%
Rating Summary:
0 Buy, 19 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
0 Buy, 19 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Credit Suisse upgraded shares of Campbell Soup (NYSE: CPB) to a Neutral rating from its previous rating of Underperform following strong Q1 results and outlook.
The firm notes that the biggest problem that CPB faced during the soup season was from General Mills (NYSE: GIS) who poached Campbell's shelf-space after Campbell attacked it with aggressive promotions.
The company announced a much more constructive approach for driving category growth this year, which includes list price increases, advertising investment, and product innovation.
GIS released its Q3 earnings with only sales growth of 1% ex currency and spending on marketing and incentive compensation declined. EPS of $0.57 beat the Street's forecast by $0.05. The company's $1 billion beverage business fell 9% in the quarter due to competitive intensity and a tough comparison. The soup sector fell 7% due to reduced promotional spending and de-loading of customer inventory.
Credit Suisse comments, "The big question hanging over the stock is the degree to which Campbell will need to "rebase" earnings and perhaps even lower its sales growth targets. Campbell has its problems, for sure, but outgoing CEO Doug Conant leaves the company in much better shape than when he joined in 2001. Information technology, corporate culture, product quality, and merchandising all improved under his watch. As a result, we think the need for reinvestment will be modest in scope."
For more ratings news on Campbell Soup click here and for the rating history of Campbell Soup click here.
Shares of Campbell Soup closed at $34.95 yesterday.
The firm notes that the biggest problem that CPB faced during the soup season was from General Mills (NYSE: GIS) who poached Campbell's shelf-space after Campbell attacked it with aggressive promotions.
The company announced a much more constructive approach for driving category growth this year, which includes list price increases, advertising investment, and product innovation.
GIS released its Q3 earnings with only sales growth of 1% ex currency and spending on marketing and incentive compensation declined. EPS of $0.57 beat the Street's forecast by $0.05. The company's $1 billion beverage business fell 9% in the quarter due to competitive intensity and a tough comparison. The soup sector fell 7% due to reduced promotional spending and de-loading of customer inventory.
Credit Suisse comments, "The big question hanging over the stock is the degree to which Campbell will need to "rebase" earnings and perhaps even lower its sales growth targets. Campbell has its problems, for sure, but outgoing CEO Doug Conant leaves the company in much better shape than when he joined in 2001. Information technology, corporate culture, product quality, and merchandising all improved under his watch. As a result, we think the need for reinvestment will be modest in scope."
For more ratings news on Campbell Soup click here and for the rating history of Campbell Soup click here.
Shares of Campbell Soup closed at $34.95 yesterday.
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