02:59 PM EDT, 08/27/2024 (MT Newswires) -- Campbell Soup's ( CPB ) fiscal fourth-quarter results will likely reflect continued weakness in the snacks category while investors focus on management's guidance and how it will navigate ongoing consumer headwinds, RBC Capital Markets said in a note emailed Tuesday.

The brokerage is modeling for Campbell Soup ( CPB ) fourth-quarter sales of $2.32 billion, implying a year-over-year improvement from $2.07 billion and virtually matching the consensus view. RBC expects adjusted earnings per share to advance to $0.62 from $0.50 year over year, in line with Wall Street's estimates.

"The company has faced challenges in (fiscal 2024) as the salty snacks category has grappled with a more meaningful slowdown than many expected," RBC Global Consumer and Retail Research Co-Head Nik Modi said.

Campbell's ready-to-serve and single-serve categories within the soup business have also been under pressure as "consumers seek out stretchable/better-value alternatives," he said.

The food and snack company is scheduled to report results for the July quarter on Thursday. RBC reiterated the sector perform rating and a $47 price target on the stock. Campbell Soup's ( CPB ) shares were down 1.7% intraday Tuesday.

Investors will likely focus on the company's fiscal 2025 guidance and look for commentary from management to justify the stock's "recent outperformance with a positive outlook," according to Modi. Ongoing momentum of Sovos Brands, which Campbell Soup ( CPB ) acquired in March, is a key piece of the future growth trajectory, he said.

The consensus is modeling for a 1.3% year-over-year increase in consolidated organic sales for the ongoing year. RBC expects Campbell Soup ( CPB ) to guide organic sales somewhere in the flat to slightly positive or negative range.

"The question will then be whether (Campbell Soup ( CPB )) can drive positive volume performance despite continued consumer headwinds, and we would expect (management) to take a cautious approach initially rather than risk cutting guidance down the road," Modi said.

Price: 49.66, Change: -0.78, Percent Change: -1.55