Conagra Brands Faces Tough Times as Earnings Fall Short
Stock Performance Lags Behind Market Comparisons
Conagra Brands, Inc. (CAG), based in Chicago, boasts a market capitalization of $13.6 billion and a diverse portfolio featuring popular brands such as Birds Eye, Duncan Hines, Healthy Choice, Marie Callender’s, Reddi-wip, Slim Jim, and Angie’s BOOMCHICKAPOP. These brands offer a wide range of premium food products to consumers.
Over the past year, CAG shares have notably lagged behind the broader market. CAG’s stock has risen just 2.5%, while the S&P 500 Index ($SPX) has surged by 36.8%. Furthermore, in 2024, CAG has experienced a slight decline, contrasting sharply with the SPX’s significant year-to-date gains of 25.7%.
Comparison with Consumer Staples Shows Challenges
Examining the situation closely, CAG’s troubles become clear. Compared to the Consumer Staples Select Sector SPDR (XLP), which has gained about 17.5% over the past year, CAG’s performance is concerning. The ETF also reported a 12.2% increase year-to-date, further illustrating CAG’s struggles during the same period.
Recently, shares of Conagra Brands dropped 10.1% following disappointing fiscal Q1 2025 earnings that missed expectations. The decline was attributed to weaker pricing, lower sales volumes, and a $27 million revenue hit caused by temporary disruptions in the Hebrew National business.
Looking ahead to the current fiscal year, which concludes in May 2025, analysts predict a 3% decline in earnings per share, projecting it will reach $2.59 on a diluted basis. CAG’s earnings history shows mixed results; it exceeded consensus estimates in three of the last four quarters.
Analyst Outlook and Price Target Adjustments
Among 15 analysts following CAG stock, the consensus rating is a “Hold,” comprised of three “Strong Buy” ratings and twelve “Holds.” This is an improvement compared to two months ago when only two analysts recommended a “Strong Buy.”
On October 17, Wells Fargo & Company (WFC) raised its price target for Conagra Brands from $30 to $31, while maintaining an “Equal-Weight” rating. After discussions with executives, the bank highlighted management’s optimism for FY25 and its potential for long-term growth.
The average price target now stands at $31.20, indicating a 9.7% increase from current price levels. The highest price target, set at $36, suggests a potential upside of 26.6%.
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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 is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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