UPDATE: UBS Doesn't Sees Upside in Campbell Soup (CPB) and Initiates Coverage at 'Sell'

(Updated - February 24, 2016 8:56 AM EST)

UBS initiated coverage on Campbell Soup (NYSE: CPB) with a Sell rating and a price target of $52. Analyst Steven Strycula said the stock's re-rating leaves few sources for upside, and he thinks Structural simple Meal headwinds will overshadow Snacking & C-fresh progress.

Strycula explained, "After years of sluggish sales and contracting margins, CPB now has a credible action plan to reduce org complexity to 3 divisions from 5, drive more impactful innovation (Kettle, organic), acquire on-trend categories (Bolthouse, Garden Fresh, Plum), and accelerate cost savings ($300m). Together, these actions make CPB's EPS algo (+4-6% CAGR) more achievable near-term and the market has responded favorably w/CPB outperforming XLP Staples index by +29pp for the trailing 52 weeks. While we applaud CPB's strategic direction, softer soup & bev trends (~45% of mix) are likely to persist and offset smaller, but faster-growing and lower ROI segments (Snacking & C-Fresh)."

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

Shares of Campbell Soup closed at $60.90 yesterday.

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