Ralcorp (RAH) and Campbell Soup (NYSE:CPB) may see increased interest in Monday's trading session after weekend media speculation about each company.
Barron's said that Ralcorp's planned spinoff of its Post cereal division should unlock value for shareholders.
The publication noted that Ralcorp rejected multiple takeover attempts from ConAgra (NYSE:CAG) this year, but quoted an investor who thinks Ralcorp could still be an acquisition target, particularly after the divestiture.
Compared to larger rivals like Kraft (KFT) and General Mills (NYSE:GIS), Ralcorp trades at a small price-to-earnings discount but at a 20% discount on enterprise value to EBITDA, Barron's noted.
Barron's said that Ralcorp's strong earnings history make it a decent buy, with or without the potential for a deal.
The publication also said that Campbell Soup stock is unlikely to perform without a turnaround in its soup business.
Barron's noted that the company said soup sales fell 4% in its fiscal fourth quarter when it reported earnings last week.
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