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 Read: Campbell 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.
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