Looking Ahead: What to Expect from Conagra Brands in Fiscal 2018

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Part 4
Looking Ahead: What to Expect from Conagra Brands in Fiscal 2018 PART 4 OF 5

What Do Analysts Recommend for Conagra Stock?

Analysts remain confident 

Most of the analysts providing recommendations on Conagra Brands (CAG) stock continue to maintain a positive outlook. However, several analysts lowered their target price on Conagra stock following the company’s fiscal 4Q17 results and lower margin projection. The company’s planned launch of innovation-led products, its focus on premium brands, and portfolio optimization efforts are expected to drive its top-line growth.

Conagra’s sales, excluding the impact of divestitures and currency movements, are showing signs of improvement. The company’s bottom line is expected to benefit from cost reductions and productivity savings, which keeps analysts positive on the stock.

What Do Analysts Recommend for Conagra Stock?

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Given the soft sales trend and slowdown in margins’ growth rate, the company’s stock could witness rating changes in the coming quarters.

Ratings summary and target price

Analysts maintained a consensus score of 2.4 on Conagra stock on a scale of 1.0–5.0. A score of 1.0 represents a “strong buy” and 5.0 signifies a “strong sell.” It’s important to note that 64.0% of the analysts recommended a “buy,” 22.0% maintained a “hold,” and 14.0% provided a “sell” rating.

Conagra stock closed at $32.43 on August 29, 2017, which represents upside potential of 25.0% compared to analysts’ target price of $40.54 per share.

Peer comparisons

Analysts continue to maintain a neutral outlook on most of Conagra’s peers. Weak consumer uptake will likely restrict these companies’ growth rates. The tough retail environment and negative currency movements are expected to remain a drag.

Of the 20 analysts covering General Mills (GIS), 10.0% rated it as a “buy,” 65.0% recommended a “hold,” and 25.0% maintained a “sell” rating. For Kellogg (K) stock, 19.0% of the 21 analysts maintained a “buy” rating, 67.0% recommended a “hold” and 14.0% provided a “sell” recommendation.

In contrast, analysts have a positive outlook on Kraft Heinz (KHC) stock—74.0% of the 19 analysts recommended a “buy,” while 24.0% provided a “hold” recommendation.


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