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Campbell's 2018 forecast still too optimistic - analysts

Nov 22 (Reuters) - Campbell Soup Co may have cut its profit estimates for 2018, but given the company's struggles with its soup business, those expectations may still be a bar too high to clear, analysts said on Wednesday.

The company on Tuesday cut its full-year profit outlook to a range of $2.95 to $3.02 per share, which is still largely above the $2.97 average estimate of analysts who reviewed their expectations following the forecast.

"Is (Campbell's) annual EPS guidance still too high? We believe the answer is 'yes'," said J.P. Morgan analyst Ken Goldman, who cut his estimate to $2.91.

"The mid-point of (the) guidance suggests that EPS will be down only slightly (year-on-year) despite the loss of major promotions with a top customer ..."

Campbell recently failed to reach an agreement with a major retailer over promotional pricing and shelf space for its canned soups that it said weighed on its full-year forecast.

The company said U.S. soup sales declined 9 percent, as consumer takeaway of soup decreased 2 percent, while lower retailer inventory accounted for the remainder of the decline.

U.S. retailers have been pushing packaged food companies to cut prices as consumers increasingly gain access to fresh, less processed foods and in the wake of Amazon.com Inc's entry into the sector through its Whole Foods acquisition.

Competition from rival General Mills' Progresso soup and private label brands is also adding to pressure on the company's business.

"(Data shows that) at both Wal-Mart and Kroger, Campbell is losing share to Mills, which has been advertising its Progresso innovation and discounting heavily," ConsumerEdge Research analyst Jonathan Feeney said, citing data from ConsumerEdge Insight.

General Mills said in September that it had witnessed strong demand ahead of the peak winter sales season, on the back of its organic line and the completion of a move to antibiotic-free chicken in its soups.

Feeney noted that while General Mills average monthly soup prices are 2.3 percent lower, Campbell's prices have only declined 0.5 percent in the same period.

"(Campbell) simply lost a soup season to a surprisingly price competitive player over which they enjoy massive share leverage."

Campbell's shares have declined about 24 percent this year, while those of General Mills have fallen 13.4 percent. (Reporting by Gayathree Ganesan; Additional reporting by Vibhuti Sharma and Uday Sampath in Bengaluru; Editing by Anil D'Silva)