Wall Street Analysts’ Recommendations for Major Food Stocks


Mar. 23 2018, Updated 7:32 a.m. ET

Analysts remain positive on KHC, CAG, and MDLZ

Most of the analysts covering Kraft Heinz (KHC), Conagra Brands (CAG), and Mondelēz (MDLZ) stock maintain “buy” recommendations on these stocks. Analysts believe that Kraft Heinz remains well-positioned to benefit from the consolidation in the food sector.

Analysts expect Kraft Heinz (KHC) to announce a major acquisition, which could bolster its sales and EPS (earnings per share) growth rate. However, concerns remain over its weak top-line performance and pressure on margins from increased input product costs.

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Analysts expect Conagra Brands’ (CAG) incremental sales from its acquired brands to drive its top-line growth. Conagra is expected to generate double-digit EPS growth, reflecting the company’s portfolio restructuring initiatives, focus on productivity, overhead savings, and share buybacks. However, increased investments in brand building are expected to remain a drag on its growth.

Analysts expect Mondelēz (MDLZ) to benefit from the continued strength in its power brands. The company’s innovation-led new product launches are gaining traction and resonate well with health-conscious consumers. Favorable currency rates are expected to support the company’s top-line and bottom-line growth rates.

Analysts remain neutral on SJM, K, HSY, CPB, and GIS stock

The graph above shows that majority of analysts maintain “hold” recommendations on Campbell Soup (CPB), Kellogg (K), J.M. Smucker (SJM), General Mills (GIS), and Hershey (HSY). Sales and margins headwinds include weak demand, increased competition, inflation in commodity prices, and higher manufacturing and transportation costs. These headwinds are expected to restrict the upside of these companies.

However, increased sales from acquired brands, innovation-driven product launches, and focus on cost-saving measures are expected to cushion the sales and earnings of these companies.


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