Valued at a market cap of $8.9 billion, Conagra Brands, Inc. (CAG) is a prominent consumer packaged foods company headquartered in Chicago, Illinois. It boasts a broad portfolio of over 70 iconic brands, including Birds Eye, Duncan Hines, Slim Jim, Healthy Choice, and Reddi-Wip. The company operates across grocery, snacks, frozen, refrigerated, international, and foodservice segments, serving both retail and foodservice customers.
Companies worth between $2 billion and $10 billion or more are typically classified as “mid-cap stocks,” and CAG fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the packaged foods industry. The company leverages brand modernization and product innovation to refresh legacy brands and launch trend-aligned products, striking a balance between value and premium offerings to foster economic resilience and reach a wide market through its robust distribution network.
However, shares of the packaged foods company have retreated 44.3% from its 52-week high of $32.90. Shares of CAG have declined 14.8% over the past three months, lagging behind the Nasdaq Food & Beverage ETF’s (FTXG) 3.6% rise over the same time frame.
In the longer term, CAG has fallen 43.3% over the past 52 weeks, considerably underperforming FTXG’s 16.1% drop over the same time frame. Moreover, on a YTD basis, shares of CAG are down 34%, compared to FTXG’s 6.3% fall.
CAG has confirmed its bearish trend by trading below both the 50-day and 200-day moving averages for most of the past year.
On July 10, Conagra Brands' shares fell 4.4% after posting disappointing Q4 results. Revenue came in at $2.8 billion and adjusted EPS at $0.56, both missing consensus estimates and marking year-over-year declines of 4.3% and 8.2%, respectively. Softer organic sales, inflationary cost pressures, currency headwinds, and unfavorable impacts from mergers and acquisitions contributed to the decline.
CAG has also underperformed its rival, Hormel Foods Corporation’s (HRL) 23.5% downtick over the past 52 weeks and 22.5% dip on a YTD basis.
Looking at CAG’s recent underperformance, analysts remain cautious about its prospects. The stock has a consensus rating of "Hold” from the 17 analysts covering it, and the mean price target of $20.60 suggests a 12.4% premium to its current price levels.
