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Analyst: Campbell Soup To Have Better Soup Season

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NEW YORK — Management of Campbell Soup Co. knows what it needs to do to have a better soup season this fall and restore volume growth without sacrificing profits, an analyst said Tuesday.

THE OPINION: Last year's soup season – roughly fall and winter – was a tough one for the nation's top branded soup maker as shoppers traded down to less expensive products to save money. Janney Capital Markets analyst Jonathan Feeney told clients in a note that he left a recent meeting with executives at the company's headquarters "convinced management understands what is needed to prevent a repeat performance."

The company must revive its volume growth to boost earnings in the next 12 months, he said. The company said it expects to have better promotions for soup this season and results should improve from the same period last year. Feeney said all food makers are cutting prices to boost sales volume, and Campbell is well positioned because its food is relatively inexpensive to produce.

He also cited a cost savings platform the company will use to help pad margins.

"In a category where the leading soups already produce most of the sales and growth, if the leader is looking to optimize the manufacturing process at the slight, possible expensive of some innovations, we think others will be forced to follow," Feeney wrote.

Feeney rates the stock a "Buy" with a $41 price target.

Campbell, based in Camden, N.J., also said Monday it will introduce more beverages in its V8 V-Fusion lines with tea and new products in China and Russia.

THE STOCK: Shares added a penny to $35.97 in afternoon trading.

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