Campbell Soup has a promising long-term growth outlook thanks to Rao’s, its popular sauces brand, according to Piper Sandler. Analyst Michael Lavery upgraded shares to overweight from neutral. He also raised his price target to $56 from $47, indicating 26.6% upside potential from Wednesday’s close. The company completed its acquisition of Rao’s parent company Sovos Brands earlier this year for approximately $2.7 billion. Although Rao’s retail sales growth slowed slightly to 18.7% in the fiscal first quarter from 23.9% in the prior quarter, Lavery said further gains lie ahead as the brand enters new markets and expands its white sauce offerings. The stock is also down more than 10% over the past three months, indicating a good entry point for investors, the analyst added. “We consider CPB one of the better-positioned large cap food names,” Lavery wrote in a Tuesday note. “Continued strong growth [is] expected” for the Rao’s brand, he added. To be sure, Lavery added that potential steel tariffs under President-elect Donald Trump’s second administration could present headwinds to Campbell Soup, which uses steel for its soup cans. Steel accounts for around 4% of the company’s costs of goods and services, per Lavery. However, the company has already secured its 2025 annual steel contract and steel prices remain depressed. “Further, roughly 75% of steel used in the US is produced in the US, which obviously would have no tariffs applied to it, helping mitigate any potential tariff risk from steel,” said Lavery. “While Rao’s tomato sauces are imported from Italy, we continue to expect tariff risk on food to be low,” the analyst continued. Analyst sentiment is mixed, with 12 of 21 covering the stock rating it as a hold, LSEG data shows. The average analyst price target signals a gain of 16%.