Shares of consumer packaged food provider Conagra Brands (NYSE:CAG) are under pressure today after the company announced its results for the second quarter. Revenue declined by 3.2% year-over-year to $3.21 billion, missing expectations by roughly 20 million. However, EPS of $0.71 outperformed estimates by $0.03.
During the quarter, organic net sales declined by 3.4%, and operating margin contracted by 261 basis points to 14%. While the macro environment remains challenging, the company is seeing an improvement in volume trends in its domestic retail operations.
At the same time, net sales contracted across Conagra’s Grocery & Snacks and Refrigerated & Frozen segments. Still, its investments in the frozen business are beginning to pay off with market share gains. Additionally, net sales in the company’s International segment increased by 8.1% on the back of favorable price/mix and volume gains.
For Fiscal Year 2024, Conagra expects organic net sales to decrease by 1% to 2%. Adjusted EPS for the year is anticipated to hover between $2.60 and $2.65.
What is CAG Stock’s Price Target?
Overall, the Street has a Hold consensus rating on Conagra Brands, and the average CAG price target of $29.92 implies a modest 2.2% potential upside in the stock. Shares of the company have tanked nearly 25% over the past year.
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