Chicago, Illinois-based Conagra Brands, Inc. (CAG) is a leading consumer packaged goods company with a market cap of $15.4 billion. The company offers a diverse range of branded food products across segments like Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Conagra Brands fits this criterion perfectly, exceeding the mark. Conagra's uniqueness lies in its strong focus on combining culinary expertise with food science innovation to create convenient, high-quality products that cater to modern consumer lifestyles.
However, the packaged foods company has experienced a decline, slipping 2.8% from its 52-week high of $33.24 reached on Sep. 10. Over the past three months, its shares have increased 13.3%, outperforming the broader S&P 500 Index's ($SPX) 4.2% gain during the same period.
However, in the long term, CAG has gained 12.7% on a YTD basis, lagging behind SPX's 19.6% gains. Moreover, CAG’s shares have surged 11.7% over the past 52 weeks, compared to SPX's 29.5% return in the same period.
Yet, CAG has been trading above both its 50-day and 200-day moving averages since mid-July.
Conagra Brands has underperformed over the past year due to inflation-driven cost increases in raw materials and transportation, persistent supply chain disruptions, and softer consumer demand in certain categories, which together have pressured its profit margins and sales growth.
Moreover, despite reporting better-than-expected Q4 adjusted earnings of $0.61 per share, the stock fell 1.5% on Jul. 11 due to lower-than-anticipated fiscal 2025 earnings guidance of $2.60 per share to $2.65 per share and forecasted organic sales likely to decline by up to 1.5%. This came alongside softer-than-expected revenue of $2.9 billion, signaling ongoing struggles with price inflation affecting consumer spending.
In addition, the stock's rival, Campbell Soup Company (CPB), has shown stronger performance than Conagra Brands. Campbell Soup shares have risen nearly 20% over the past 52 weeks and are up 18.5% on a YTD basis.
Due to CAG’s relatively weak price action over the past year, analysts are cautious about its prospects. The stock has a consensus rating of “Hold” from the 14 analysts in coverage, and it is currently trading above the mean price target of $30.93.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
