Campbell Soup (CPB) is still iconic

With the markets still in a choppy/consolidation mode (or perhaps worse), it's best to consider including a few defensive stocks in your portfolio. With this in mind, Campbell Soup is worth an evaluation.

Campbell (NYSE: CPB) is the world's biggest soup maker and a leader in the U.S. packaged foods segment. The company is best known for its Campbell's Soup brand, which attained cultural icon status due to renditions by artist Andy Warhol, central figure in pop art.

Analysts see F2008 revenue increasing an impressive 8-10%, excluding the sale of its Godiva Chocolate division. The soups group is expected to benefit from ramping low-salt product and improved-convenience product sales, and modest pricing power.

Also, productivity improvements should contribute to bottom-line gains. Longer-term, CPB has ample room to increase market share internationally (particularly in China and Russia), aided by new products and an expanded distribution network. The Reuters F2008/F2009 EPS consensus estimates for CPB are $2.06/$2.25.

The risks? Analysts are keeping an eye on Campbell's ingredient costs, as well as the impact of generic-brand competitors in key CPB segments.

The First Call mean rating for CPB is: Buy [16 firms]. Mean 2008 target: $40 [high: $46, low: $35].

Stock Analysis: Campbell Soup is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from CPB's shares. Sell/Stop Loss if you were to purchase shares in this company: $18.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.