Campbell Soup (CPB) is scheduled to report their fiscal fourth quarter 2009 results before the market opens on Friday, September 11th. Based on our analysis, we at EarningsPreviews.com are expecting CPB to report better than expected results that exceed Wall Street’s consensus expectations.

Analyst Expectations

We are forecasting revenues of $1.55 billion and EPS of $.27. This would represent a 10% decrease in revenues from last year’s $1.72 billion in the same period. The current analyst consensus estimates calls for revenues of $1.52 billion and EPS of $.26.

Last quarter, Campbell Soup delivered much stronger than expected earnings results and raised their earnings guidance for the remainder of the year. While the company has been able to increase margins by engaging in productive cost cutting, sales numbers have been particularly weak over the last couple of quarters. We anticipate soft sales once again this quarter as Campbell continues to face strong competition while the economic environment continues to be quite weak.

We expect that management will provide fiscal 2010 guidance on the earnings call.  However, EPS guidance is likely to be conservative with the midpoint at or below the current Street consensus.

Stock Performance

Since the beginning of 2009, Campbell Soup’s shares have gained 3% and have underperformed the 6% gain in the Dow Jones industrial average. However last year, CPB’s stock fell only 16% and outperformed the 34% drop in the Dow Jones industrial average.

Valuation

Shares are now trading at 13x consensus 2010 EPS estimates. This is inline with the relative valuations of their peer group. While CPB offers investors a relatively safe stock with a nice 3.2% dividend yield, we would expect the shares to remain range bound until the company can demonstrate significant top-line improvement.

Recommendation: Hold with a $32 price target.