Analysts remain upbeat on CAG’s prospects
The majority of analysts providing ratings on Conagra Brands (CAG) stock maintain a positive outlook. Recently, J.P. Morgan raised its target price on Conagra stock to $42.00 from $37.00 per share. Meanwhile, UBS upgraded Conagra stock to “neutral” from “sell” and raised the price target to $37.00 from $33.00.
Conagra Brands’ sales are showing signs of improvement driven by new products and incremental gains from recently acquired brands including Duke’s and BIGS. However, the company’s sales are projected to fall on a YoY (year-over-year) basis, reflecting brand divestitures and weak demand.
Despite sales deleverage, Conagra Brands’ EPS is expected to grow driven by cost savings and productivity measures. Meanwhile, price increases and lower share count could further support the EPS growth rate. However, inflation in input costs is likely to restrict the margins growth and the EPS.
Rating and target price summary
Of the 14 analysts covering CAG stock, about 71.0% provided a “buy” rating, and 29.0% of them suggested a “sell.” Moreover, Conagra stock closed at $37.34 on December 14, 2017, which reflects an implied return of 8.3% to the analysts’ target price of $40.43 per share.
In comparison, analysts also maintain a positive outlook on Mondelēz International (MDLZ) and Kraft Heinz (KHC) stock in the food space. In comparison, they maintain a “neutral” outlook on Hershey (HSY), J.M. Smucker (SJM), General Mills (GIS), Kellogg (K), and Campbell Soup (CPB) stock.
To learn more about the outlook of packaged food manufacturers, read our previous series, Can These Food Stocks Meet Investors’ Expectations in 2018?