Oppenheimer Adjusts Freshpet Price Target to $180 From $155, Maintains Outperform Rating

Campbell Soup Company CPB has been optimizing its portfolio by divesting non-core businesses. It announced the divestiture of its noosa yogurt brand to Lakeview Farms. The noosa yogurt brand is an ideal fit for Lakeview Farms, which produces fresh dips, desserts and specialty products. Notably, noosa’s products fully complement Lakeview’s existing product offerings.

The deal is anticipated to close in the first quarter of 2025, upon the satisfaction of regulatory approvals. Campbell, a leading food producer known for its iconic brands, expects the sale of noosa yogurt to have no major impact on its results for fiscal 2025.

Background of noosa Yogurt

Campbell acquired noosa in March 2024 as part of the Sovos Brands, Inc. buyout. Since acquiring noosa yogurt, the company has been exploring strategic options for noosa, as the yogurt category does not align with its core business strategy.

The yogurt brand has performed well, generating net sales of $177 million for the 12 months ending Oct. 2024. The sale of noosa yogurt aligns well with Campbell's strategy to concentrate on its portfolio of leading brands, reinforcing its commitment to focus on core business areas. The transaction is expected to be slightly dilutive to Campbell's earnings per share, reducing EPS by 1 cent in fiscal 2025.

Management expressed satisfaction with the decision to sell noosa yogurt to a company dedicated to the refrigerated category.

Strategic Moves Drive Campbell’s Growth

Campbell’s recent acquisitions and divestitures demonstrate a proactive approach to enhancing its market position and profitability. One of the key drivers of this growth is the addition of Sovos Brands, which brings a diverse portfolio of products to Campbell. Sovos Brands’ portfolio includes a diverse range of products, including pasta sauces, dry pasta, soups, frozen entrées, frozen pizza and yogurts, which are marketed under the brand names Rao’s, Michael Angelo’s and noosa.

Sovos Brands has significantly bolstered Campbell’s performance with its better-than-expected contributions. The company’s sales improved by 11% in the fourth quarter of fiscal 2024 attributed to the buyout of Sovos Brands. Through the fourth quarter of fiscal 2024, the company generated cost synergies of $10 million related to the Sovos Brands integration plan.

The performance of Sovos Brands, particularly Rao's, has been outstanding, with sales growing faster than expected, contributing positively to the overall performance. Management remains confident about the long-term sales growth of Sovos Brands, expecting it to be in the mid-single-digit range.

Campbell’s Path Forward

Looking ahead, Campbell Soup provided optimistic guidance for fiscal year 2025, projecting net sales growth of 9-11%, including contributions from the Sovos Brands acquisition and the impact of Pop Secret’s divestiture. The company expects organic net sales growth in the range of flat to up 2%, suggesting a slight improvement in the volume/mix compared to fiscal 2024.

Adjusted EBIT growth is likely to be 9-11%, including the impacts of the abovementioned acquisition and divestiture. The guidance also includes expectations of inflation in the low-single-digit range. Adjusted EPS is envisioned to increase 1-4% to $3.12-$3.22 in fiscal 2025 compared with $3.08 delivered in fiscal 2023.

Fiscal 2025 includes an additional week compared with fiscal 2024, which is factored into the guidance. The extra week is estimated to contribute about 2% points to both reported and organic net sales, as well as adjusted EBIT. It is also expected to add nearly 6 cents to adjusted EPS. These recent developments underscore the dynamic nature of the company's operations and its strategic planning.

The Zacks Rank #3 (Hold) company’s shares have lost 3.9% in the past three months compared to the industry’s decline of 6.8%.

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Ingredion Incorporated INGR manufactures and sells sweeteners, starches, nutrition ingredients and biomaterial solutions derived from wet milling and processing corn and other starch-based materials. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

INGR has a trailing four-quarter earnings surprise of 9.5%, on average. The Zacks Consensus Estimate for Ingredion’s current financial year’s earnings indicates growth of 12.5% from the year-ago reported number.

Freshpet Inc. FRPT manufactures, distributes and markets natural fresh meals and treats for dogs and cats. It currently carries a Zacks Rank #2 (Buy). FRPT has a trailing four-quarter earnings surprise of 144.5%, on average.

The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings indicates growth of 27.3% and 224.3%, respectively, from the prior-year reported levels.

McCormick & Company, Incorporated MKC is a leading manufacturer, marketer and distributor of spices, seasonings, specialty foods and flavors to the entire food industry. It currently carries a Zacks Rank #2. MKC has a trailing four-quarter earnings surprise of 13.8%, on average.

The Zacks Consensus Estimate for McCormick’s current fiscal-year sales and earnings indicates growth of 0.6% and 8.2%, respectively, from the prior-year reported levels.

Zacks Investment Research

Inter Parfums, Inc. IPAR has announced its initial financial guidance for 2025, expecting net sales of $1.51 billion and earnings per share (EPS) of $5.35, both indicating a 4% increase from 2024 estimates. This outlook implies a cautious approach, factoring in global market dynamics, potential geopolitical tensions and policy changes in the United States. The company’s growth is expected to stem from both its existing portfolio and new product innovations.

IPAR’s Established Brands and Strategic Expansions

Inter Parfums is set to deliver an impressive array of product launches in 2025, focusing on both innovation and expansion across European and U.S. markets. For its European operations, the company will introduce new extensions to existing fragrance families, including Montblanc Explorer, Jimmy Choo Man, Coach Woman and Man, and Lacoste L12.12 and Original.

Also, Solferino, a proprietary brand featuring a collection of ten luxury fragrances crafted by renowned perfumers, will debut in 2025. This high-end collection is designed for the niche fragrance market and will be available through an ultra-selective distribution network. By the end of the year, Solferino will also have its first dedicated boutique and an e-commerce platform.

In the United States, the company plans to launch Iconic, a new blockbuster men’s fragrance for GUESS, along with extensions for existing GUESS lines to capitalize on the brand’s strong performance. For MCM, a four-scent collection will be introduced alongside a refreshed look and scent for the MCM Diamond backpack fragrance in the first half of the year. The Ferragamo line will also see significant additions with the introduction of a new pillar, Fiamma and an extension for Ferragamo Men later in 2025.

Further developments include new pillars for several brands, such as two scents for the Donna Karan Cashmere Collection, a blockbuster duo for Abercrombie & Fitch and new lines for Roberto Cavalli. The company is also exploring opportunities to expand into new personal care categories, including body mists and creams.

Inter Parfums’ Confident Outlook Amid Market Challenges

Despite modest growth projections, Inter Parfums remains confident in its ability to achieve record results. The performance of the 2024 holiday season and early 2025 orders will be critical to meeting these targets. With a strong global footprint and a robust portfolio of prestigious brands, the company is well-positioned to navigate market uncertainties and capitalize on new opportunities in both luxury and mainstream markets.

Other Growth Factors of IPAR

Inter Parfums continues to benefit from strong momentum in the fragrance market, driven by its robust portfolio of legacy and new brands, effective marketing strategies and a widespread global distribution network. The company’s third-quarter performance showcased solid growth across major regions, including North America, Western Europe and Asia/Pacific. New additions like Roberto Cavalli and Lacoste have been particularly successful, significantly boosting quarterly sales. These brands are expected to play a pivotal role in driving further growth in the coming year.

European operations have been a key growth driver, with standout performances from Jimmy Choo and Montblanc. U.S. operations have also shown steady progress, led by the success of GUESS and Ferragamo, both of which continue to expand its consumer base with new and innovative product launches.

Wrapping Up

Inter Parfums is poised to leverage its strong portfolio and strategic innovations to drive growth amid a competitive market landscape. With a focus on expanding existing brands and introducing high-end lines like Solferino, the company is well-positioned to meet consumer demand for both classic and luxury fragrances.

Despite the global fragrance market's continued vibrancy and robust demand, the company’s sell-in has been slower than its sell-out, with retailers adopting a leaner inventory approach. High SG&A costs are also a concern. This Zacks Rank #4 (Sell) stock has lost 4% in the past year against the industry’s 19.5% growth. However, Inter Parfums' cautious yet optimistic outlook indicates its commitment to adaptability and resilience, underscoring the company’s readiness to capitalize on emerging opportunities across global markets.

Stocks to Consider

Ingredion Incorporated INGR serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

INGR has a trailing four-quarter earnings surprise of 9.5%, on average. The Zacks Consensus Estimate for Ingredion’s current financial-year earnings indicates growth of 12.5% from the year-ago reported number.

Freshpet Inc. FRPT is a pet food company that manufactures and markets natural fresh foods, refrigerated meals and treats for dogs and cats in the United States and Canada. It currently carries a Zacks Rank #2 (Buy). FRPT has a trailing four-quarter earnings surprise of 144.5%, on average.

The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings indicates growth of 27.3% and 224.3%, respectively, from the prior-year reported levels.

McCormick & Company, Inc. MKC is a leading manufacturer, marketer and distributor of spices, seasonings, specialty foods and flavors to the entire food industry. It currently carries a Zacks Rank #2. MKC has a trailing four-quarter earnings surprise of 13.8%, on average.

The Zacks Consensus Estimate for MKC’s current fiscal-year sales and earnings indicates growth of 0.6% and 8.2%, respectively, from the prior-year reported levels.

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