Conagra Brands Faces Financial Struggles Amid Challenging Market Conditions
Conagra Brands, Inc. (CAG), a prominent player in the packaged foods industry, is based in Chicago, Illinois. The company holds a market capitalization of $12 billion and produces a wide range of popular consumer food brands, such as Healthy Choice, Hunt’s, Birds Eye, Slim Jim, and Orville Redenbacher’s.
Subpar Performance Compared to Market Competitors
In the last 52 weeks, Conagra’s stock has not performed well. CAG shares fell 12.6%, contrasting sharply with the S&P 500 Index ($SPX), which climbed 22.8%. Year-to-date in 2025, CAG’s shares dropped 9.9%, while the SPX posted gains of 3.4%.
Struggling Against Consumer Staples
Focusing on more specific comparisons, Conagra has lagged behind the Consumer Staples Select Sector SPDR (XLP), which has seen a gain of 7.6% in the past year and 1.1% in 2025.
Challenges Impacting Profitability
The past year has been difficult for Conagra as rising inflation in commodities like meat, eggs, and sweeteners has pressured profit margins. This situation has forced the company to adjust its inflation forecasts and revise profit expectations. To address falling sales and intense competition from private-label brands, Conagra has increased promotional tactics and price cuts, which have further strained profitability. Supply chain disruptions have also created obstacles, complicating operational efficiencies. Moreover, strategic reviews, including potential sales of underperforming brands, have added uncertainty.
Latest Earnings Report Signals Concerns
On December 19, CAG shares fell by over 2% after the release of its Q2 earnings report. While Conagra’s results exceeded market expectations, sales dipped slightly to $3.2 billion compared to the previous year. The company subsequently lowered its adjusted EPS forecast to a range of $2.45–$2.50 from an earlier estimate of $2.60–$2.65. Additionally, it reduced its adjusted operating margin forecast to approximately 14.8%, down from the previous range of 15.6%–15.8%.
Future Earnings Expectations
For the current fiscal year, which ends in May, analysts predict a 7.9% decline in CAG’s EPS, bringing it to $2.46 on a diluted basis. Conagra’s earnings history has been varied; it has beat consensus estimates in three of the last four quarters but missed on one occasion.
Analysts’ Outlook and Price Targets
Currently, among 15 analysts, the consensus rating for CAG stock stands at “Hold.” This rating includes three “Strong Buy” categories and 12 “Holds.”
This outlook has remained relatively stable in recent months. Analyst Matthew Smith from Stifel Financial Corp. (SF) lowered the price target for Conagra from $30 to $28 while keeping a “Hold” rating. This adjustment reflects the sector’s valuation discount, weak revenue expectations, and pressures for reinvestment that affect margins. Although food stocks may seem appealing based on historical values, Stifel expresses caution about revenue growth in 2025.
Potential for Growth in Stock Target
The mean price target sits at $29.20, suggesting a potential rise of 16.8% from current levels. The highest target of $33 indicates a possible increase of 31.9%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more information, please view the Barchart Disclosure Policy here.
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