Conagra Brands (NYSE:CAG) Stock Falls 5.4% - Time to Sell?

Key Points

• Conagra shares fell 5.4% to about $13.37 despite the company beating first-quarter earnings and revenue estimates, with adjusted EPS of $0.41 versus consensus near $0.28–$0.31.
• Underlying performance remained pressured: revenue declined 1.4% year over year, operating profit fell 22.7%, and free cash flow was negative $128 million. Management nevertheless reaffirmed fiscal 2027 adjusted EPS guidance of $1.40–$1.50.
• Analyst sentiment is cautious, with a consensus “Reduce” rating and average price target of $14.13. The company offers a $0.70 annualized dividend, yielding about 5.1%, while net debt remains high at $7.4 billion despite a year-over-year reduction.

Shares of Conagra Brands (NYSE:CAG - Get Free Report) traded down 5.4% on Wednesday. The stock traded as low as $13.53 and last traded at $13.3740. Approximately 5,660,703 shares traded hands during mid-day trading, a decline of 62% from the average session volume of 14,775,021 shares. The stock had previously closed at $14.13.

Key Conagra Brands News

Here are the key news stories impacting Conagra Brands this week:

• Positive Sentiment: Adjusted earnings were approximately $0.41 per share, ahead of analysts’ estimates near $0.28–$0.31 and above $0.39 in the year-ago quarter. Revenue of $2.60 billion also slightly exceeded the $2.59 billion consensus. Reuters earnings report
• Positive Sentiment: Management reaffirmed fiscal 2027 guidance, including organic net sales growth of negative 3% to negative 1%, adjusted operating margin of 10.0% to 10.5%, and adjusted EPS of $1.40 to $1.50. The EPS range is broadly in line with the $1.44 analyst consensus. Conagra first-quarter results
• Positive Sentiment: Demand for some pantry staples, including Slim Jim meat snacks, helped the company surpass profit expectations. Net income increased about 6% year over year to $174 million.
• Neutral Sentiment: Conagra reduced net debt by approximately $193 million year over year to $7.4 billion, which supports financial flexibility, although leverage remains a key consideration for investors.
• Negative Sentiment: First-quarter revenue fell 1.4% year over year to $2.6 billion, while organic net sales declined 1.1%. Weakness was concentrated in the Grocery & Snacks and Refrigerated & Frozen segments, overshadowing the earnings beat.
• Negative Sentiment: Reported operating profit declined 22.7%, gross profit dropped 3.4%, and SG&A expenses rose 4.4%, indicating continued margin pressure. Free cash flow was negative $128 million for the quarter.

Wall Street Analysts Forecast Growth

Several research firms have recently weighed in on CAG. Royal Bank Of Canada cut their target price on Conagra Brands from $16.00 to $14.00 and set a "sector perform" rating on the stock in a research report on Thursday, July 16th. Weiss Ratings reaffirmed a "sell (d)" rating on shares of Conagra Brands in a research note on Tuesday, September 22nd. Deutsche Bank Aktiengesellschaft lifted their price target on shares of Conagra Brands from $12.00 to $13.00 and gave the stock a "hold" rating in a research note on Friday, September 18th. Barclays boosted their target price on shares of Conagra Brands from $16.00 to $17.00 and gave the company an "overweight" rating in a research note on Friday, July 17th. Finally, UBS Group raised their price target on shares of Conagra Brands from $13.00 to $14.00 and gave the stock a "neutral" rating in a research note on Thursday, July 16th. One research analyst has rated the stock with a Buy rating, eleven have issued a Hold rating and six have issued a Sell rating to the company's stock. According to data from MarketBeat, the stock presently has a consensus rating of "Reduce" and an average target price of $14.13.

Conagra Brands Stock Performance

The company has a current ratio of 0.90, a quick ratio of 0.31 and a debt-to-equity ratio of 1.02. The stock has a market cap of $6.51 billion, a PE ratio of -3.41 and a beta of -0.01. The business's 50-day moving average price is $15.26 and its 200-day moving average price is $14.62.

Conagra Brands (NYSE:CAG - Get Free Report) last announced its earnings results on Wednesday, September 30th. The company reported $0.41 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.28 by $0.13. The company had revenue of $2.60 billion for the quarter, compared to analyst estimates of $2.59 billion. Conagra Brands had a positive return on equity of 10.44% and a negative net margin of 16.99%.The firm's quarterly revenue was down 1.4% compared to the same quarter last year. During the same period in the prior year, the company posted $0.39 EPS. Conagra Brands has set its FY 2027 guidance at 1.400-1.500 EPS. As a group, equities research analysts expect that Conagra Brands will post 1.45 earnings per share for the current fiscal year.

Conagra Brands Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Thursday, December 3rd. Investors of record on Thursday, November 5th will be issued a dividend of $0.1750 per share. The ex-dividend date of this dividend is Thursday, November 5th. This represents a $0.70 dividend on an annualized basis and a yield of 5.1%. Conagra Brands's dividend payout ratio is -17.50%.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently made changes to their positions in CAG. All Terrain Financial Advisors LLC raised its holdings in shares of Conagra Brands by 0.3% during the 4th quarter. All Terrain Financial Advisors LLC now owns 176,971 shares of the company's stock worth $3,063,000 after acquiring an additional 609 shares during the period. Harbour Investments Inc. raised its position in shares of Conagra Brands by 80.4% during the 4th quarter. Harbour Investments Inc. now owns 1,573 shares of the company's stock valued at $27,000 after buying an additional 701 shares during the period. Tema ETFs LLC lifted its holdings in Conagra Brands by 9.3% in the second quarter. Tema ETFs LLC now owns 8,546 shares of the company's stock valued at $115,000 after acquiring an additional 725 shares during the last quarter. Hantz Financial Services Inc. lifted its holdings in Conagra Brands by 12.7% in the fourth quarter. Hantz Financial Services Inc. now owns 7,047 shares of the company's stock valued at $122,000 after acquiring an additional 794 shares during the last quarter. Finally, Root Financial Partners LLC grew its position in Conagra Brands by 20.9% in the first quarter. Root Financial Partners LLC now owns 4,855 shares of the company's stock worth $76,000 after acquiring an additional 839 shares during the period. Hedge funds and other institutional investors own 83.75% of the company's stock.

About Conagra Brands

Conagra Brands, Inc is a packaged food company headquartered in Chicago, Illinois. The company develops, produces and markets branded food products sold through grocery stores, mass merchandisers, club stores, convenience stores, foodservice operators and e-commerce channels.

Its portfolio includes frozen, refrigerated, grocery and snack products. Well-known brands include Birds Eye, Healthy Choice, Marie Callender's, Banquet, Duncan Hines, Reddi-wip, Slim Jim, Hunt's, Chef Boyardee, Orville Redenbacher's, Vlasic, PAM and Angie's BOOMCHICKAPOP.

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