Analysts raise target price
Conagra Brands (CAG) reported better-than-expected fiscal 2Q18 results. The company’s top line returned to growth, driven by incremental sales from the recently acquired Duke’s, Frontera, BIGS, and Angie’s BOOMCHICKAPOP brands. Meanwhile, the company’s frozen segment continued to grow, driven by innovative products.
To further strengthen its frozen segment, the company announced the acquisition of Sandwich Bros. of Wisconsin. The move is likely to bolster the company’s top-line growth, as Sandwich Bros. flatbread pocket sandwiches fit with consumers’ demand for “better-for-you” products.
Packaged food manufacturers Hershey (HSY), Campbell Soup (CPB), Kellogg (K), and McCormick (MKC) have also banked on acquisitions to strengthen their product offerings and meet changing consumer demand. For more on the latest acquisitions in the food industry, read Food Manufacturers: Acquisitions, Portfolio Rejigs to Drive Sales.
Following Conagra’s strong earnings results, Deutsche Bank raised its price target to $45 from $41 with a “buy” recommendation. Meanwhile, Barclays raised its target price by 8% to $43 per share, and Credit Suisse increased its target price from $37 to $40.
Of the 14 analysts covering Conagra, 71.0% recommended “buy,” and 29% recommended “hold.” Analysts have set a target price of $41.71 per share on Conagra stock, which implies an upside potential of 10.2% based on its closing price of $37.85 on December 21, 2017.