Key Takeaways
- Fiscal Q1 2027 results from Conagra arrive Wednesday, September 30, prior to the opening bell.
- Wall Street forecasts sales around $2.59 billion, representing a 2% decline year over year.
- Earnings per share are pegged at 31 cents, marking a 21% decrease compared to the prior year period.
- Shares of CAG stock hover around $14, reflecting a year-to-date decline of approximately 14%.
- Analyst consensus remains at Hold for CAG stock, with price objectives spanning $12 to $16.
Shares of Conagra Brands hover around the $14 mark as the company prepares to release its fiscal first quarter earnings results on Wednesday. CAG stock has declined approximately 14% year to date.
The Chicago-based packaged food company, known for brands including Slim Jim, Birds Eye, Banquet, and Hunt’s, will unveil its quarterly performance before market hours on September 30.
Expectations on Wall Street point to challenging results. Street consensus calls for revenue around $2.59 billion, reflecting a year-over-year decrease of approximately 2%.
The earnings forecast stands at 31 cents per share. This represents a contraction of about 21% versus the comparable quarter a year ago.
Consumer behavior shows a shift toward more economical food choices. This trend is creating headwinds for the company’s revenue generation.
Cost Pressures Weigh on Profitability
Conagra is grappling with elevated expenses across raw materials, packaging materials, and logistics. The company anticipates full-year inflation impacts ranging from 5% to 6%.
Tariff-related expenses totaling $40 million are projected to weigh most heavily on the current quarter. Leadership also intends to increase investment in marketing and promotional activities.
Operating margin guidance for the full year sits between 10% and 10.5%. This represents a significant decline from the company’s historical average near 16%.
For the opening quarter specifically, adjusted operating margin is anticipated in the high-single-digit territory. This would represent a deterioration from the prior year’s 11.8%.
Price adjustments implemented by the company won’t materialize at retail until the midpoint of the second quarter. This timing leaves limited opportunity to counterbalance current quarter headwinds.
Wall Street Divided on Valuation Outlook
Analyst sentiment on CAG stock remains predominantly cautious. The consensus rating stands at Hold across 13 analysts, comprising one Buy recommendation, eight Hold ratings, and four Sell opinions.
Andrew Lazar at Barclays maintains a Buy stance with a $16 price objective, highlighting the dividend as a source of value. Thomas Palmer from J.P. Morgan holds a Neutral view with a $15 target.
Both RBC Capital and UBS have established price targets at $14. Bank of America and Goldman Sachs assign Sell ratings with identical $13 objectives.
Evercore ISI places its target at $12.50. Bernstein maintains the Street’s most bearish target at $12, emphasizing persistent margin challenges and sluggish grocery category volumes.
The mean 12-month price target across analysts stands at $13.73. This suggests potential downside of approximately 3% from present trading levels.
Conagra reduced its quarterly dividend payout to $0.175 per share earlier in the year. This strategic decision unlocks roughly $1 billion across a three-year period for manufacturing facility improvements and supply chain infrastructure.
The organization is also pursuing productivity improvements exceeding 4% of cost of goods sold for fiscal 2027. Additional advertising expenditure is being directed toward frozen meals and meat snacks, two segments demonstrating modest volume expansion lately.
Zacks presently assigns Conagra a Sell rank, accompanied by an Earnings ESP of +3.22%. The company’s performance over the past four quarters shows an average earnings surprise of approximately 5%.
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