12:37 PM EST, 12/02/2024 (MT Newswires) -- Campbell's Company (CPB) is expected to report relatively in-line fiscal Q1 results, but the company's outlook remains cautious, RBC Capital Markets said in a note Monday.

The firm believes management's optimistic view of the macro environment and its categories could prove too positive, potentially leading to downward guidance revisions later in the year.

The brokerage remains cautious about the headwinds facing Campbell's, particularly in the snacking category, and sees limited potential for meaningful outperformance in the near term.

Campbell saw growth during the pandemic from increased household penetration and a more diverse consumer base. However, recent feedback has been negative, with the salty snacks category struggling and CPB's soup business facing pressure from trade-down to private labels, according to the note.

RBC is more favorable on the Meals & Beverages segment compared to Snacks, citing trends like value-seeking and a shift toward at-home meals. However, the firm remains wary of heightened competition and a lack of visibility in the broader packaged food industry, which may limit Campbell's near-term performance.

"While we are optimistic that their new PEAK cost savings plan will help improve the company's financial profile, we simply think a demand backdrop that remains challenged with limited clarity on recovery timing will likely temper investor enthusiasm in the near-term," the note added.

RBC has a sector perform rating on Campbell's with a $51 price target.

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