Valued at a market cap of $14.5 billion, Chicago-based Conagra Brands, Inc. (CAG), is a leading consumer packaged goods company. The company offers premium edible products across Grocery & Snacks; Refrigerated & Frozen; International; and Foodservice segments to meet evolving consumer preferences. Some of its iconic brands include Birds Eye®, Duncan Hines®, and Healthy Choice®.
Shares of this consumer-packaged goods company have significantly underperformed the broader market over the past 52 weeks. CAG has declined 13.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 28.9%. In 2024, shares of CAG are up 5.7%, compared to SPX's 11.2% gains on a YTD basis.
Zooming in further, CAG has lagged behind the Consumer Staples Alphadex ETF FT's (FXG) 7.8% gains over the past 52 weeks and a 6.3% increase on a YTD basis.
Conagra Brands' underperformance is primarily due to weaker-than-expected financial performance in certain quarters, inconsistent organic revenue growth, and shifting consumer preferences towards health-conscious and sustainable food options.
Nevertheless, on April 4, the company’s shares witnessed a nearly 5.4% surge after it reported stronger-than-expected Q3 results, attributed particularly to success in the domestic retail business, driven by investments in the refrigerated and frozen foods segment.
For the current fiscal year, ending in May, analysts expect CAG's EPS to decline by 5.4% to $2.62. However, the company's earnings surprise history is promising. It beat the consensus estimates in all of the last four quarters.
Among the 14 analysts covering the stock, the consensus rating is a “Hold.” That’s based on one “Strong Buy” rating and 13 “Holds.”
The configuration for the stock has remained steady over the past months.
On April 8, Barclays analyst Andrew Lazar maintained an "Overweight" rating on Conagra Brands and raised the price target to $34, which is also the Street-high target for the stock. This implies a potential upside of 12.3% from the current price levels.
The mean price target of $31.23 represents a premium of just 3.1% to CAG's current levels.
On the date of publication, Sohini Mondal 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.
