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MILWAUKEE — An analyst on Thursday boosted his estimates for Campbell Soup Co., saying he is optimistic about the soup maker's near-term potential to beat expected earnings.
The Camden, N.J.-based company held meetings this week with analysts and officials on Wednesday said they expect to beat their long-range earnings growth target this year, even in a weak economy and tough conditions overseas.
The nation's market leader in soup, Campbell saw a "disappointing soup season," Janney analyst Jonathan Feeney wrote to clients.
"But they've focused their response on the major source of underperformance," he wrote to clients, citing efforts to boost offerings in the company's light, low-sodium and Select Harvest brands.
Feeney raised his estimates for fiscal 2009 and fiscal 2010 for the soup maker, saying he was optimistic about its ability to compete in categories attractive to consumers.
The company said it is retooling its healthier varieties of ready-to-serve Chunky soups, which have been struggling after years of strong sales.
Feeney said the company also stands to gain from productivity efforts and by focusing its portfolio on "simple meals" — a category worth $80 billion. Campbell has 48 percent of the soup market, he wrote, a scale that gives it a strong advantage.
"They can be nimble, yet have unmatched expertise and scale economies in an attractive category," he wrote.
Feeney raised his fiscal 2009 earnings-per-share estimate by 2 cents to $2.15 and his fiscal 2010 earnings-per-share estimate by a penny to $2.31.
Campbell's told analysts at a presentation at its Maxton, N.C., plant that its fiscal 2009 adjusted profit growth will be above its previously announced 5 percent to 7 percent target, implying income of $2.19 to $2.24 per share in 2009.
According to Thomson Reuters, analysts expect earnings per share of $2.17 in fiscal 2009 and $2.30 the following year.
Shares of Campbell rose 21 cents to $29.95 in morning trading Thursday.
