Valued at a market cap of $9 billion, Conagra Brands, Inc. (CAG) is a leading packaged foods company headquartered in Chicago, Illinois. Its portfolio includes well-known brands such as Healthy Choice, Hunt’s, Birds Eye, Slim Jim, Orville Redenbacher’s, and Marie Callender’s, spanning categories like frozen meals, snacks, condiments, and shelf-stable goods.
This packaged foods company has significantly lagged behind the broader market over the past 52 weeks. Shares of CAG have declined 36.8% over this time frame, while the broader S&P 500 Index ($SPX) has soared 21.1%. Moreover, on a YTD basis, the stock is down 31.8%, compared to SPX’s 7.9% uptick.
Narrowing the focus, CAG has also considerably underperformed the First Trust Nasdaq Food & Beverage ETF’s (FTXG) 8.9% loss over the past 52 weeks and 3.2% drop on a YTD basis.
On Jul. 10, shares of CAG plunged 4.4% after its weaker-than-expected Q4 earnings release. Both its quarterly revenue of $2.8 billion and adjusted EPS of $0.56 fell short of the consensus estimates and experienced year-over-year declines. Due to a decline in organic sales, driven by softer consumption trends, currency headwinds, and the unfavorable impact of M&A, the company’s top line decreased 4.3% from the year-ago quarter. Moreover, on the earnings front, its adjusted EPS dropped 8.2% from the year-ago quarter, missing analyst estimates by 5.1%.
For fiscal 2026, ending in May, analysts expect CAG’s EPS to decline 24.4% year over year to $1.74. The company’s earnings surprise history is disappointing. It missed the consensus estimates in three of the last four quarters, while exceeding on another occasion.
Among the 17 analysts covering the stock, the consensus rating is a "Hold" which is based on two “Strong Buy,” 13 “Hold,” one "Moderate Sell,” and one “Strong Sell” rating.
The configuration is more bearish than two months ago, with none of the analysts suggesting a “Sell” rating.
On Jul. 11, Robert Dickerson from Jefferies Financial Group Inc. (JEF) maintained a "Hold" rating on CAG, with a price target of $19, indicating a marginal potential upside from the current levels.
The mean price target of $21.19 represents an 11.9% premium from CAG’s current price levels, while the Street-high price target of $27 suggests an ambitious upside potential of 42.6%.
