On Mar 13, 2014 we issued an updated research report on
Campbell Soup Company
), based on better-than-expected second-quarter fiscal 2014
results. The strong results have triggered an uptrend in the
Zacks Consensus Estimate. The company's brand expansion strategy
and cost containment efforts were the driving factors.
The company's top line of $2,281 million and bottom line of 76
cents easily surpassed the Zacks Consensus Estimate while rising
6% and 19%, respectively, year over year. With promising top and
bottom-line growth, Campbell appears to be an impressive option
for investors in the near future as it has surpassed the Zacks
Consensus Estimate in 11 out of 12 quarters. Going forward, this
upbeat performance is expected to continue as evident from
management s impressive guidance for fiscal 2014.
For fiscal 2014, Campbell expects sales from continuing
operations to augment 4-5%, while adjusted earnings per share is
projected to increase 2-4% and lie in the band of $2.53-$2.58.
Further, the company's focus on its brand portfolio enhancement
is evident from its recent acquisitions and joint ventures.
Campbell acquired three new growth engines in fiscal 2013
including Bolthouse Farms, Plum Organics and the Kelsen Group,
which cater to combined sales of nearly $1 billion. Further, the
company has developed two joint ventures in Mexico with Grupo
Jumex and Conservas La Costena that enhance Campbell's
manufacturing and distribution capabilities as well as its
presence in the global market.
Campbell also intends to boost its top line and increase return
on investment through strategic frameworks. Its focus on
augmenting the North American soup and simple meal business and
expanding overseas operations bode well for future growth.
Further, we believe that the company's prudent investment and
strategic initiatives toward product innovation and brand
building will broaden its customer base and profitability.
However, rising commodity costs, intense competition and exposure
to foreign currency fluctuations continue to be challenging
factors for the company, which may undermine its operating
Campbell currently holds a Zacks Rank #3 (Hold).
Key Picks from the Sector
Other better-ranked stocks in the same industry include
Diamond Foods, Inc.
The Hain Celestial Group, Inc.
Post Holdings, Inc.
), all sporting a Zacks Rank #2 (Buy).
CAMPBELL SOUP (CPB): Free Stock Analysis
DIAMOND FOODS (DMND): Free Stock Analysis
HAIN CELESTIAL (HAIN): Free Stock Analysis
POST HOLDINGS (POST): Free Stock Analysis
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