Chris Johnson and Jon Lewis

Campbell Soup (CPB): Mmm, Mmm Good?

    Tweet This

Free Trading Guides

Campbell Soup (CPB) is scheduled to report earnings on Friday, Sept. 11.

Analysts expect CPB to hold its own for the quarter, with no growth in profits from a year ago. That compares favorably with the past four quarters, in which the company averaged 25% growth in earnings. So, expectations are muted, to say the least.

The same lowered expectations are evident among our sentiment indicators, as well. Though it's currently in the middle of its annual range, CPB's put/call ratio is showing signs of rolling over.

That could be encouraging, as previous peaks in the ratio (in late April, early March, and late December) marked bottoms in the share price (circles in chart below).

Analysts are likewise skeptical of CPB's future, as just a third (four of 12) rate the stock a "buy." That leaves some room for upgrades, especially if CPB can impress with its report and outlook next week.

We like to look at companies that report after most of their competitors to get a feel for how the industry is doing, which is the case for CPB.

Competitors in the processed and packaged foods space -- including General Mills (GIS), HJ Heinz Co. (HNZ) and Kraft (KFT) -- generally exceeded earnings expectations. More importantly, the stocks gained significant ground after their respective reports. That bodes well for CPB.

We'll end the analysis with the key factor for this potential trade -- the technicals.