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Packaged Food Companies: Analysts’ Recommendations

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May. 30 2019, Published 7:28 a.m. ET

Analysts’ recommendations

Most of the analysts have recommended a “hold” on General Mills (GIS), J.M. Smucker (SJM), and Kellogg (K) shares. An expected deceleration in the net sales growth rate, low organic sales, a heightened promotional environment, and input and packaging cost headwinds are expected to hurt these food companies’ sales and margins. Higher interest expenses are expected to hurt these companies’ bottom lines in the near term.

Analysts expect these food companies’ bottom lines to stabilize in the coming quarters. However, the increase is expected to stay low.

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Campbell Soup

Analysts recommended a “sell” on Campbell Soup (CPB) stock. Continued weakness in organic sales and the earnings decline are expected to hurt Campbell Soup stock. The net sales growth, which had stellar growth recently, is expected to stay low as the company annualizes its Snyder’s-Lance and Pacific Foods acquisition.

Analysts have a target price of $33.64 per share on Campbell Soup, which implies a downside of 7.1% based on its closing price of $36.22 on May 29.

Conagra Brands

Conagra Brands’ (CAG) strong financial performance during the last reported quarter and an expected improvement in sales and margins are driving its stock. Most of the analysts recommended a “buy” on Conagra Brands stock. Analysts have a target price of $33.17 per share on Conagra Brands, which implies an upside of 21.7%.

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