Why Analysts Are Confident about CAG Stock



Positive outlook on stock

The majority of analysts covering Conagra Brands’ (CAG) stock continue to have a positive outlook on the stock. Conagra’s sales are expected to benefit from its planned launch of innovation-driven products. Meanwhile, the company’s focus on portfolio optimization through premiumization of its offerings and exiting low-margin businesses will further help sales growth in the long run. Besides, recently acquired Duke’s Meat and BIGS Seeds brands are performing well and are projected to supplement its sales.

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Also, the company is focusing on reducing costs, driving productivity through SKU rationalization, and is divesting underperforming brands. These efforts could drive margins growth in coming quarters. Notably, the company’s efforts are gaining traction, as excluding divestitures and currency movements, Conagra’s sales are showing signs of improvement, thus making analysts confident on the stock.

Rating summary

Analysts have given CAG stock a 2.4 on a scale of 1.0 (strong buy) to 5.0, implying a “strong sell.” As of September 21, 2017, 64% of the analysts providing the ratings on CAG stock maintained a “buy,” 22% recommended a “hold,” and 14% rated it a “sell.”

Analysts maintained a 12-month target price of $40.54 per share on CAG stock, implying an upside of 21.3% to the company’s closing price of $33.42 on September 21.

Alongside Conagra, analysts also have a positive take on Tyson Foods (TSN) and Kraft Heinz (KHC) stock. Meanwhile, analysts maintain a neutral outlook on other major food players including Kellogg (K), General Mills (GIS), Hershey (HSY), and J.M. Smucker (SJM).


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