Conagra Brands Misses on Q2 Earnings on Higher Inflation

Chicago, Illinois-based packaged foods company Conagra Brands reported lower-than-expected earnings in the fiscal second quarter and cautioned that high raw material and shipping costs are expected to hit full-year margins.

The world’s leading food company reported quarterly adjusted earnings of $0.64 per share for the quarter ended in November, missing the Wall Street consensus estimates of $0.68 per share.

However, the company’s revenue beat analysts’ expectations, rising more than 2% to $3.06 billion from a year ago. The company posted a quarterly net income of $275.5 million.

The company lowered its outlook for annual operating margin from 16% to around 15.5%. Organic net sales are now expected to rise about 3% annually, as opposed to 1%.

At the time of writing, Conagra Brands shares traded 2.65% higher at $34.42 on Friday. The stock slumped nearly 6% in 2021.

Executive Comments

“Looking ahead, we expect to continue experiencing cost pressures above original expectations in the second half of fiscal 2022. However, we believe the sustained elevated consumer demand coupled with the mitigating actions we have successfully executed and will continue executing, put us on track to overcome these near-term challenges, improve margins in the back half of the fiscal year, and deliver on our profit plan,”  noted Sean Connolly, president and chief executive officer of Conagra Brands.

Analyst Comments

“We rate Conagra Brands (CAG) Equal-weight. Valuation of 10.5x CY23 EBITDA reflects current challenges, but we are cautious on demand risk post-COVID, as well as GM pressure given rising commodities, and limited pricing power,” noted Pamela Kaufman, equity analyst at Morgan Stanley.

“Advantaged legacy CAG topline growth outlook: Exposure to frozen, opportunity to turnaround refrigerated business, and snacking growth should sustain LSD org sales growth. PF deal increases operational complexity and reduces fundamental visibility: Greater risk of PF disappointing given higher expectations from management’s strong turnaround track record. Solid topline growth potential but limited mid-term target upside: Opportunity to close gross margin gap vs peers, but see downside risk given the inflationary environment and if synergy estimates fall short of F22 targets.”

Conagra Brands Stock Price Forecast

Five analysts who offered stock ratings for Conagra Brands in the last three months forecast the average price in 12 months of $38.20 with a high forecast of $40.00 and a low forecast of $35.00.

The average price target represents a 13.93% change from the last price of $33.53. From those five analysts, two rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $36 with a high of $45 under a bull scenario and $19 under the worst-case scenario. The firm gave an “Equal-weight” rating on the packaged foods company’s stock.

Several other analysts have also updated their stock outlook. Deutsche Bank cut the target price to $35 from $36. Jefferies lifted the price objective to $40 from $38.

Technical analysis also suggests it is good to hold for now as 100-day Moving Average and 50-200-day MACD Oscillator is showing a mixed signal.

Check out FX Empire’s earnings calendar

What do FOMC ‘minutes’ Mean for the Stock Market?

When the Fed might begin unloading its bond holdings has fast become a red hot topic. The “minutes” released yesterday from the central bank’s December meeting indicate nearly all members favor starting the balance sheet reduction as soon as this year.

Monetary policy tightening

Investors largely view this sort of action as a form of monetary policy tightening designed to slow the economy and most believed it was still at least a year or even two away.

The Fed is currently on track to stop adding to its nearly $8.2 trillion worth of Treasuries and mortgage-backed securities by mid-March.

For what it’s worth, this is only the second time in its history that the Fed has embarked on an asset purchase “taper” program. After completing the previous (and first) “taper” in 2014, the Fed essentially maintained its balance sheet until 2018, when it began allowing some bonds to roll off. That was ended in 2019 however, when demand for bank reserves outstripped the Fed’s supply, causing volatility in short-term money markets and forcing the Fed to again add to its balance sheet.

Not surprisingly, investors are worried about the Fed once again making a misstep, especially considering that its balance sheet is twice the size it was in 2018.

It’s also worth noting that the Fed hasn’t lifted its benchmark interest rate since 2018.

Interest rates hike

Wall Street currently anticipates anywhere from two to four rate hikes this year, so this is another area where investors worry the central bank could get it wrong. The possibility that they simultaneously attempt to both raise rates and reduce asset holdings means double the chances of missing the mark.

As there is no Fed policy meeting in February, many Wall Street insiders fear that officials could move too aggressively at the upcoming January 25-26 meeting as they face increasing pressures to beat back inflation.

Nothing in recent data provides a reason the Fed might suddenly strike a more dovish tone, either. That includes the job market, which has struggled to return to pre-pandemic levels and which many bulls have hoped might sway the Fed to maintain supports for longer. However, even with nearly 4 million fewer jobs than what the U.S. had in January 2020, the Fed considers the labor market to be mostly healed.

Yesterday, ADP‘s private payroll report showed that employers added almost +900,000 workers in December, which is more than double the +400,000 gain expected from the Labor Department’s official report due on Friday. While the two data sets have diverged greatly in recent months, Friday’s report is still largely expected to exceed expectations.

Today, investors will be digesting the ISM Services Index. Most attention will be focused on the “prices paid” component, which fell slightly in November but was still the third-highest reading ever recorded. Other economic data today include International Trade and Factory Orders. Finally, earnings worth noting include Bed Bath & Beyond, Bridgestone, Conagra, Sanderson Farms, and Walgreens.

Earnings Week Ahead: Walgreens Boots Alliance, Constellation Brands and Acuity Brands in Focus

With the stock market ending 2021 on a strong footing, investors will carefully monitor the latest news on the rapidly spreading Omicron coronavirus to see how it affects the U.S. economy and earnings in 2022. The following is a list of earnings slated for release January 3-7, along with a few previews. Although next week’s earnings are unlikely to have much of an effect on major market movements, it is sufficient to gauge investors’ sentiment.

Earnings Calendar For The Week Of January 3

Monday (January 3)

No major earnings are scheduled for release.

Tuesday (January 4)

TICKER COMPANY EPS FORECAST
SGH Smart Global Holdings $1.74

 

Wednesday (January 5)

TICKER COMPANY EPS FORECAST
RPM RPM International $0.86
SMPL Simply Good Foods $0.35
UNF UniFirst $2.15

 

Thursday (January 6)

IN THE SPOTLIGHT: WALGREENS BOOTS ALLIANCE, CONSTELLATION BRANDS

WALGREENS BOOTS ALLIANCE: The blue-chip pharmaceutical name is expected to report its fiscal first-quarter earnings of $1.22 per share, which is unchanged from the same period a year ago. The Deerfield, Illinois-based retail pharmacy provider’s revenue is predicted to slump more than 9% to around $32.9 billion.

The company has been able to beat earnings per share (EPS) estimates most of the time in the last two years. According to ZACKS Research, for the full-year earnings to be $4.91 per share and revenue of $131.5 billion.

Walgreens Boots Alliance operates a top 2 retail pharmacy chain in the US as well as Boots Pharmacy in Europe. The new Health Segment, guided to contribute as much as 60% to LT EPS growth in FY25 and beyond, carries significant investment requirements and integration risk. Management’s inexperience in healthcare could cause growing pains,” noted Ricky Goldwasser, Equity Analyst at Morgan Stanley.

“Risk of core operations slipping as focus increasingly shifts to healthcare.”

CONSTELLATION BRANDS: Beer and wine seller is expected to report its fiscal third-quarter earnings of $2.82 per share, which represents year-over-year growth of nearly 9% from $3.09 per share seen in the same quarter a year ago.

The New York-based Fortune 500 international beverage alcohol company revenue is predicted to slump more than 6% to around $2.28 billion. The company has been able to beat earnings per share (EPS) estimates twice in the last four quarters and revenue in all four.

According to ZACKS Research, for the full-year earnings to be $10.01 per share and revenue $8.64 billion.

“While Constellation Brands historically made its bones as a winery and distillery, we now view the firm as one of the most stellar brewers across our global coverage. After parlaying AB InBev’s antitrust quandary (as it sought to acquire Mexican brewer Grupo Modelo) into exclusive U.S. ownership rights to brands like Corona and Modelo, we see the firm’s overall Mexican beer portfolio as auspiciously situated at the confluence of unwavering secular and demographic trends. With an enviable growth profile and best of breed margins, we have confidence that the beer business can thrive even amid an evolving industry landscape,” noted Jaime M. Katz, Senior Equity Analyst at Morningstar.

“The firm’s outlook is not completely rosy, particularly with its wine and spirits business in flux. It has divested lower-quality brands as it places more intentionality behind its “high growth, high margin “long-term strategy, but the remaining brands (such as Meiomi, Kim Crawford, Svedka vodka, and High West craft whiskey) will still face rife competition. Constellation’s foray into explosive-growth categories like hard seltzer are also demanding nontrivial investment, given the competitive intensity and brand equity already built up by the incumbents. Nevertheless, we believe the experience of the management team will allow the firm to navigate these risks.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 6

TICKER COMPANY EPS FORECAST
BBBY Bed Bath & Beyond $0.03
CAG ConAgra Brands $0.67
FC Franklin Covey $0.05
HELE Helen of Troy $2.87
KRUS Kura Sushi USA $-0.16
PSMT PriceSmart $0.95
SCHN Schnitzer Steel Industries $1.63
WDFC WD-40 $1.25

 

Friday (January 7)

IN THE SPOTLIGHT: ACUITY BRANDS

The lighting and building management firm is expected to report its fiscal first-quarter earnings of $2.2 per share, which represents year-over-year growth of over 17%, up from $1.87 per share seen in the same period a year ago.

The Atlanta, Georgia-based company would post year-over-year revenue growth of more than 11% to around $ 880.24 million. The company has been able to beat earnings per share (EPS) estimates most of the time in the last two years.

“We remain constructive on Acuity’s product breadth, top-notch agent channel, and leadership in control integration. This positioning should allow the company to outperform the market, even when macro challenges present themselves. The company boasts a 40%+ gross margin and has a strong cash flow generation profile,” said Jeffrey Osborne, equity analyst at Cowen in Oct 6 research note.

“As macro conditions improve we expect more large-scale higher-margin projects will begin to move off the sidelines. This should help to further support the company’s margin profile longer term. We believe that Acuity is differentiated relative to its peers and has an early lead in the intelligent building market thanks to its Distech and Atrius products. Longer-term, we see an opportunity in the UVC germicidal market and believe the company is well-positioned given its many partnerships in the space.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 7

TICKER COMPANY EPS FORECAST
AYI Acuity Brands $2.2

 

What to Expect in the Markets in 2022

In 2021 the S&P 500 has returned more than 15% for the third straight year, investors have to wonder whether there will be any more upside in the stock market over the coming year. The S&P 500 have risen about 27% last year, and the index’s P/E ratio is above its long-term average, which raises concerns about overbought conditions. A forward price-to-earnings ratio of 21.3 significantly exceeds the long-term average of 15 for the S&P 500.

In addition, earnings are expected to slow down this year after a strong 2021. In light of the newly hawkish U.S. Federal Reserve and the ever-evolving virus, analysts and investors are having a difficult time gauging the future direction of the stock market.

With the high inflation rate, investors are facing more uncertainty as they attempt to justify record stock prices, and the fast-spreading new Omicron variant is putting an end to the optimistic hopes that the global economy would improve by 2022.

“We expect solid economic and earnings growth in 2022 to help U.S. stocks deliver additional gains (this) year. If we are approaching—or are already in—the middle of an economic cycle with at least a few more years left (our view), then we believe the chances of another good year for stocks in 2022 are quite high. We believe the S&P 500 could be fairly valued at 5,000–5,100 at the end of 2022, based on an EPS estimate of $235 for 2023 and an index P/E between 21 and 21.5,” noted Ryan Detrick, CMT, Chief Market Strategist, LPL Financial.

“Prospects for above-average economic growth and accompanying earnings gains in 2022 point to another potentially good year for stock investors. While the pandemic is not completely behind us as the COVID-19 Omicron variant spreads rapidly (though with a high proportion of mild cases), and there are several other risks to watch, particularly inflation, stocks have historically done well in mid-cycle economies. We do not expect 2022 to be an exception,” LPL Financial’s Detrick added.

Jurrien Timmer, Fidelity’s global macro director, believes that stocks are poised to deliver positive returns in 2022, but not as much as they did this year, due to a slowdown in earnings growth and a tightening of monetary policy by the U.S. Federal Reserve.

“Since the brief-but-sharp 35% decline almost 2 years ago, US stocks have risen to record highs, thanks in part to the timely and massive fiscal and monetary policy response to COVID-19 and the resulting lockdowns,” noted Jurrien Timmer, director of global macro in Fidelity’s Global Asset Allocation Division.

“Now as 2022 begins, I expect the markets to mean-revert back to trend-like growth, and for the Fed to take the first steps on the road back to a neutral monetary policy,” he added.

As stock market trends continue to change rapidly in the pandemic world, it is becoming increasingly difficult to predict future stock performance, especially with analysts and investors dealing with hawkish central banks, on the one hand, and the risk of a further economic shutdown on the other.

According to a stockmarket.com report, three FAANG stocks will be closely watched this year. In the context of the broader stock market’s recovery, tech stocks are once again in focus. Among the most successful stocks in the sector, the FAANG stocks shine brightest as S&P 500 companies with a tech component make up a large portion of the index. In case you’re not familiar, this group of stocks includes Meta Platforms (formerly known as Facebook), Amazon, Apple, Netflix, and Google’s parent company Alphabet will be in focus in 2022.

S&P 500 and Nasdaq End Down After Hitting Record Highs

The S&P 500 and Nasdaq reached fresh record highs but quickly fell into negative territory after an auction of 30-year Treasuries showed less demand than some investors expected and pushed yields higher.

Data indicated U.S. consumer prices rose by the most in 13 years last month, while so-called core consumer prices surged 4.5% year over year, the largest rise since November 1991.

Economists viewed the price surge, driven by travel-rated services and used automobiles, as mostly temporary, aligning with Federal Reserve Chair Jerome Powell’s long-standing views.

“Any time you get an uptick in interest rates the stock market is going to get nervous, especially on a day like today,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

The S&P 500 growth index dipped 0.05%, while the value index fell 0.70%.

“With growth outperforming value, the takeaway is clearly that inflation from a market perspective is not a real threat in the long term,” said Keith Buchanan, a portfolio manager at GLOBALT Investments in Atlanta, Georgia.

Ten of the 11 major S&P 500 sector indexes ended lower, with real estate, consumer discretionary and financials each down more than 1%.

JPMorgan Chase & Co stock fell 1.5% after the company reported blockbuster quarterly profit growth but warned that the sunny outlook would not make for blockbuster revenues in the short term due to low interest rates.

Goldman Sachs Group Inc dipped 1.2% after its quarterly earnings exceeded forecasts.

Citigroup, Wells Fargo & Co and Bank of America were due to report their quarterly results early on Wednesday.

PepsiCo Inc gained 2.3% after raising its full-year earnings forecast, betting on accelerating demand as COVID-19 restrictions continue to ease.

June-quarter earnings per share for S&P 500 companies are expected to rise 66%, according to Refinitiv data, with investors questioning how long Wall Street’s rally would last after a 16% rise in the benchmark index so far this year.

All eyes now turn to Fed Chair Jerome Powell’s congressional testimony on Wednesday and Thursday for his comments about rising price pressures and monetary support going forward.

The Dow Jones Industrial Average fell 0.31% to end at 34,888.79 points, while the S&P 500 lost 0.35% to 4,369.21.

The Nasdaq Composite dropped 0.38% to 14,677.65.

Conagra Brands Inc dropped 5.4% after the packaged foods company warned that higher raw material and ingredient costs would take a bigger bite out of its profit this year than previously estimated.

Boeing Co fell 4.2% after the Federal Aviation Administration said late on Monday some undelivered 787 Dreamliners have a new manufacturing quality issue.

Declining issues outnumbered advancing ones on the NYSE by a 2.85-to-1 ratio; on Nasdaq, a 3.06-to-1 ratio favored decliners.

The S&P 500 posted 39 new 52-week highs and no new lows; the Nasdaq Composite recorded 61 new highs and 73 new lows.

Volume on U.S. exchanges was 9.5 billion shares, compared with the 10.5 billion average for the full session over the last 20 trading days.

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Cynthia Osterman)

Conagra Brands Tops Earnings, Revenue Estimates in Q3

Chicago, Illinois-based packaged foods company Conagra Brands reported better-than-expected earnings and revenue in the third quarter of the fiscal year 2021, largely driven by continued elevated at-home food consumption due to the COVID-19 pandemic.

The world’s leading food company said its net sales surged more than 8% to $2.77 billion during the three months ended on February 28, 2021. That was above the market expectations of $2.72 billion. Adjusted earnings per share came in at 0.59, beating analysts’ consensus estimates of 0.58 per share.

Net sales for the grocery & snacks segment increased 10.8% to $1.1 billion in the quarter reflecting: a 2.3% decrease from the impact of the Sold Businesses; and a 13.1% increase in organic net sales. On an organic net sales basis, volume increased 9.4% and price/mix increased 3.7%. Volume benefited from continued elevated at-home food consumption as a result of the COVID-19 pandemic.

Conagra Brands forecasts organic adjusted operating margin in the range of 14% to 15% and adjusted EPS between $0.49 to $0.55 in the fourth quarter of the fiscal year 2021. For fiscal 2022, the company expects net sales growth (3-year CAGR ending fiscal 2022) of +1% to +2%, an adjusted operating margin of 18% to 19%, and adjusted EPS of $2.63 to $2.73.

Conagra Brands’ shares, which about 6% in 2020, traded nearly flat at $37.19 on Thursday.

Executive Comments

“We remain confident that each of our retail domains – frozen, snacks, and staples – is well-positioned to sustain the benefits of the eat-at-home habits consumers have developed during the COVID-19 pandemic. Our continued business momentum, coupled with our disciplined approach to investment, reinforce our confidence in the long-term potential of the business and our ability to create sustained value for our shareholders,” said Sean Connolly, president and chief executive officer of Conagra Brands.

“We further demonstrated this confidence by repurchasing nearly $300 million of our common stock this quarter, which came after we raised our quarterly dividend 29% earlier this fiscal year.”

Analyst Comments

Conagra Brands (CAG) Q3 EPS of $0.59, slightly ahead of cons. $0.58, driven by below-the-line items. Org. sales growth beat (+9.7% vs. +7.3%), although gross and op. margins missed, albeit at the low end of mgmt’s Q3 guide. FY’22 guidance reaffirmed with 8.8mm shares repo’d in Q3, which could add $0.05 to FY’22 EPS. Q4 guide above cons. sales, but below on implied op. profit at margin guide midpoint, driven by cost inflation. The question now on margin progression in FY’22,” noted Rob Dickerson, equity analyst at Jefferies.

Conagra Brands Stock Price Forecast

Three analysts who offered stock ratings for Conagra Brands in the last three months forecast the average price in 12 months of $37.00 with a high forecast of $40.00 and a low forecast of $34.00.

The average price target represents a -0.40% decrease from the last price of $37.15. Of those three analysts, one rated “Buy”, one rated “Hold” and one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $38 with a high of $48 under a bull scenario and $25 under the worst-case scenario. The firm gave an “Equal-weight” rating on the packaged foods company’s stock.

“Advantaged legacy Conagra Brands (CAG) topline growth outlook: Exposure to frozen, an opportunity to turnaround refrigerated business, and snacking growth should sustain LSD org sales growth. PF deal increases operational complexity and reduces fundamental visibility: Greater risk of PF disappointing given higher expectations from management’s strong turnaround track record,” noted Pamela Kaufman, equity analyst at Morgan Stanley.

“We see solid topline growth but limited potential for mid-term target upside: Opportunity to close gross margin gap vs peers, but see downside risk if topline/synergy estimates fall short of optimistic F22 targets. The valuation reflects higher leverage: 10.5x 2022 EV/EBITDA valuation reflects relatively higher leverage of 3.6x net debt/EBITDA.”

Several other analysts have also updated their stock outlook. Conagra Brands had its price target boosted by Credit Suisse Group to $34 from $33. They currently have an underperform rating on the stock. Zacks Investment Research upgraded Conagra Brands to a hold rating from a sell rating and set a $36 price objective. Jefferies Financial Group issued a buy rating and a $41 price objective for the company.

Check out FX Empire’s earnings calendar

Conagra Brands Hits Two-Month High After Upbeat Outlook

Conagra Brands, Inc. (CAG) jumped over 4% Tuesday after the packaged food giant surpassed Wall Street expectations and issued an upbeat forecast. The Chicago-based firm posted fourth-quarter fiscal 2020 earnings of 75 cents per share, easily eclipsing analysts’ expectation of 51 cents a share. The figure also grew 108% from the profit reported in the year-ago quarter. Meanwhile, revenue came in at $3.13 billion, well ahead of $2.39 billion reported in the March quarter last year.

Behind The Numbers

Management credited increased at-home food consumption resulting from the coronavirus pandemic and favorable pricing as major drivers for the better-than-expected quarterly result. Furthermore, the firm anticipates improving demand across its retail business in the first quarter of fiscal 2021 and reaffirmed its full-year earnings guidance range of between $2.66 and $2.76, outpacing analysts’ consensus forecast of $2.50 per share.

Analyst View

Last month, Jeffries analyst Rob Dickerson upgraded the company’s stock to ‘Buy’ from ‘Hold’ and lifted his price target by $10 to $41 a share – representing a 17% premium to Tuesday’s $35.17 close. Dickerson says more people eating at home over the next few years bode well for the packaged food giant.

“A reduction in CAG’s brand portfolio risk via higher at-home food consumption increases FY’22 target achievability, in our view, given further top-line tailwinds,” the analyst said. Dickerson also argues that the stock’s 15% relative P/E valuation discount relative to its U.S. food industry rivals is unjustified. As of July 1, 2020, the company trades at 15 times forward earnings, around 20% below its 5-year average multiple of 18 times.

More broadly, Wall Street analysts have a mostly bullish outlook for the stock, with 6 ‘Buy’ ratings, 9 ‘Hold’ Ratings, and 1 ‘Strong Buy’ rating. Interestingly, no analysts recommend selling the stock, indicating possible further upside in the months ahead.

Technical Outlook

Conagra now trades more than 35% above its pandemic-selloff low, placing it into bull market territory. Buyers piled into the stock after yesterday’s upbeat earnings report, driving the price to a two-month high on above-average volume. Furthermore, the MACD indicator crossed back above its trigger line to generate a buy signal. The breakout may result in a retest of the multiyear high around $42. Alternatively, if the breakout fails, look for a decline to $31, where price finds a confluence of support from the April and September 2019 swing highs, and rising 200-day simple moving average.

CAG Chart

Conagra Brands Forecast 13% jump in Q1 Organic Sales; Shares Jump 6%

Conagra Brands Inc, an American packaged foods company headquartered in Chicago, said that it predicts more than 10% rise in organic net sales this quarter after the company beat Q4 revenue projections on solid demand for frozen foods and snacks amid coronavirus-led lockdowns, sending shares of the processed and packaged foods maker up 6%.

The company’s fourth-quarter net sales increased 25.8%; organic net sales increased by 21.5%, with double-digit growth in each of the Company’s three retail segments. Fiscal 2020 net sales increased by 15.9%, and organic net sales increased 5.6%, the company said.

Diluted earnings per share from continuing operations (EPS) for the fourth quarter grew 57.7% to $0.41, and adjusted EPS more than doubled to $0.75. EPS for fiscal 2020 grew 12.4% to $1.72, and adjusted EPS grew 13.4% to $2.28. The Company projected first-quarter fiscal 2021 of organic net sales growth in the range of 10% to 13%, adjusted operating margin in the range of 17.0% to 17.5%, and adjusted EPS in the range of $0.54 to $0.59.

Following this announcement, Conagra Brands shares climbed 6% premarket after earnings beat past estimates.

Although several U.S. states have started to ease lockdowns, the demand for packaged foods remains high in the current quarter, since consumers prefer to cook by themselves rather than venturing out as fears of coronavirus remain high.

Sean Connolly, president and chief executive officer of Conagra Brands, said in a press release, “Our business clearly benefited from increased at-home eating in the fourth quarter, as the elevated retail demand outweighed the reduced foodservice demand. In retail, many consumers tried our modernized products for the first time and then returned for more.”

“While we are optimistic about the long-term implications of recent consumer behaviour shifts, given COVID-19 uncertainties, we are only providing guidance for the first quarter of fiscal 2021. We intend to provide an update on our fiscal 2021 outlook next quarter,” he added.

Conagra Brands outlook and price target

Ten analysts forecast the average price in 12 months at $36.00 with a high of $41.00 and a low of $32.00. The average price target represents a 6.82% increase from the last price of $33.70, according to Tipranks. From that ten, four analysts rated ‘Buy’, six rated ‘Hold’ and none rated ‘Sell’.

Morgan Stanley target price is $32 with a high of $44 under a bull scenario and $22 under the worst-case scenario. JP Morgan raised price target to $39 from $34 and Deutsche Bank raised the target price to $32 from $31. On the technical chat, 50-day Moving Average and 100-200-day MACD Oscillator signals a strong buying opportunity.

Analyst comment

“Exposure to frozen, opportunity to turnaround the refrigerated business, and snacking growth should sustain LSD org sales growth,” wrote Pamela Kaufman, equity analyst at Morgan Stanley in his last month’s note.

“We see solid HSD EPS growth but limited potential for mid-term target upside: Opportunity to close gross margin gap vs peers but see downside risk if topline/synergy estimates fall short of optimistic F22 targets,” she added.