Campbell's (CPB) is likely to deliver "largely in-line" Q2 results on March 11 with organic sales growth below estimates but earnings per share in line with expectations, Morgan Stanley said in a note Friday.

The investment firm said, however, that with an expected H2 "snacks inflection still unclear" the company's management may temper its H2 guidance.

"This seems appreciated by the market and could help de-risk near-term expectations, but is unlikely to shift the narrative," the note said.

Meanwhile, NielsenIQ data shows that Campbell's "promotional activity accelerated during the quarter" and while the investment firm believes this was a planned move after previous management comments, the "magnitude of promotional intensity could still represent a source of incremental downside risk."

Morgan Stanley has an equal-weight rating on Campbell's and lowered the company's price target to $27 from $28, citing factors like softer scanner trends and a "more cautious view" on the timing of a recovery for the company's Snacks segment.

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