11:32 AM EDT, 08/27/2024 (MT Newswires) -- Campbell Soup's ( CPB ) upcoming fiscal Q4 results are likely to show ongoing challenges for its Snacks division but the fiscal 2025 outlook is set to be the main focus, RBC Capital Markets said in a note Monday.

Analysts, including Nik Modi, said they are cautious about the sector but think the Sovos Brands acquisition is a key part of the company's future growth. This deal will likely be highlighted at Campbell Soup's ( CPB ) investor day in September, which could positively impact the stock.

For fiscal 2025, the market expects organic sales growth of 1.3% and net sales growth of 8.8%, the analysts said, adding that they think the company will likely guide for organic sales to be flat or slightly up/down, assuming minimal or no impact from pricing changes.

The key issue will be whether the company can achieve positive volume growth despite ongoing consumer challenges. The management is likely to be cautious in its forecasts to avoid the need for downward adjustments later, the note said.

The analysts said that with a strong performance from the Sovos portfolio, net sales targets seem achievable and organic growth guidance might also be better than expected once Sovos results are included starting in mid-fiscal Q3 in 2025.

RBC has a sector perform rating on the stock and a $47 price target.

Price: 49.87, Change: -0.57, Percent Change: -1.13