Conagra Brands (CAG) AI Stock Analysis

• Market Cap: $11.02B
• Dividend Yield: 6.06%
• Average Volume (3M): 5.88M
• Price to Earnings (P/E): 33.8
• Beta (1Y): -0.03
• Revenue Growth: -3.15%
• EPS Growth: -65.38%
• Country: US
• Employees: 18,500
• Sector: Consumer Defensive
• Sector Strength: 69
• Industry: Packaged Foods
• EPS (TTM): 0.51
• Shares Outstanding: 477,362,460
• 10 Day Avg. Volume: 7,486,683
• 30 Day Avg. Volume: 5,875,891
• PEG Ratio: -1.05
• Price to Book (P/B): 1.30
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.87
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $26.42
• Price Target Upside: 17.53% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

• Rating: 68 Neutral
• Price Target: ―

Conagra Brands' overall stock score of 68 reflects a stable but challenged financial performance. The company's strong balance sheet and cash flow generation are significant positives. However, profitability and revenue growth issues, coupled with technical weakness and high P/E ratio, weigh on the score. The earnings call highlighted both operational strengths and external challenges, notably in supply chain and inflation, impacting future performance.

Positive Factors

Debt Management

CAG announced an agreement to sell Chef Boyardee for $600 million, which will be used to pay down debt.

Dividend Yield

CAG's valuation is attractive with its 5.2% dividend yield the highest in our food coverage.

Sales Growth

Planned investments to stimulate demand is broadly gaining traction, especially in grocery/snacks and refrigerated/frozen segments.

Negative Factors

Competitive Pressure

Increasing competitive pressures and a focus on frozen products by a key peer will likely make Conagra Brands' recovery more challenging.

Earnings Impact

The sale of Chef Boyardee is expected to be approximately 4% dilutive to EPS.

Supply Chain Challenges

Supply chain challenges have forced Conagra Brands to lower their FY25 financial outlook.

Conagra Brands Business Overview & Revenue Model

Company Description

Conagra Brands, Inc., together with its subsidiaries, operates as a consumer packaged goods food company in North America. The company operates in four segments: Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice. The Grocery & Snacks segment primarily offers shelf stable food products through various retail channels in the United States. The Refrigerated & Frozen segment provides temperature-controlled food products through various retail channels in the United States. The International segment offers food products in various temperature states through retail and foodservice channels outside of the United States. The Foodservice segment offers branded and customized food products, including meals, entrees, sauces, and various custom-manufactured culinary products packaged for restaurants and other foodservice establishments in the United States. The company sells its products under the Birds Eye, Duncan Hines, Healthy Choice, Marie Callender's, Reddi-wip, Slim Jim, Angie's BOOMCHICKAPOP, Duke's, Earth Balance, Gardein, and Frontera brands. The company was formerly known as ConAgra Foods, Inc. and changed its name to Conagra Brands, Inc. in November 2016. Conagra Brands, Inc. was founded in 1861 and is headquartered in Chicago, Illinois.

How the Company Makes Money

Conagra Brands generates revenue primarily through the sale of its diverse range of packaged food products to retailers, foodservice operators, and industrial customers. The company's key revenue streams are its branded consumer products, sold through grocery stores, supermarkets, and e-commerce platforms, and its commercial food products, supplied to restaurants and other foodservice establishments. Conagra leverages significant economies of scale in manufacturing and distribution to maintain competitive pricing and profitability. Additionally, strategic partnerships and acquisitions play a crucial role in expanding Conagra's brand portfolio and market reach, driving sales growth and enhancing its ability to innovate in response to consumer trends.

Conagra Brands Financial Statement Overview

Summary

Conagra Brands shows a mixed financial performance. The balance sheet is strong with low leverage and solid equity financing. However, there are challenges in profitability and revenue growth, as seen in declining margins and inconsistent revenue trends. Cash flow generation remains robust, supporting overall financial health. Attention to operational efficiencies and cost management is crucial for improving profitability and sustaining growth.

Income Statement

Conagra Brands shows a mixed performance in its income statement. The TTM (Trailing-Twelve-Months) gross profit margin is approximately 26.4%, indicating a stable ability to generate profit from sales. However, the net profit margin has decreased to 2.8% from 5.5% in 2022, raising concerns about cost control and profitability. Revenue growth has been inconsistent, with a decline of 2.6% from 2023 to 2024. The EBIT margin has significantly decreased to 2.1% in the TTM, down from 8.9% in 2021, reflecting challenges in operational efficiency.

Balance Sheet

Conagra Brands exhibits a strong balance sheet with a debt-to-equity ratio of 0.22 in the TTM, a substantial improvement from previous years, indicating reduced leverage. The equity ratio is robust at 42.3%, suggesting a stable financial structure with adequate shareholder equity to cover assets. Return on equity (ROE) is 3.7% in the TTM, which is lower than previous years, mainly due to declining net income. Overall, the balance sheet reflects a stable financial position with reduced financial risk.

Cash Flow

The cash flow statement reveals a commendable free cash flow generation, with a TTM free cash flow of $1.45 billion, showing resilience despite decreased net income. The operating cash flow to net income ratio is approximately 5.56, indicating strong cash generation relative to net income. However, free cash flow has decreased by 11% from the previous year, necessitating attention to sustaining operational cash flows. Overall, cash flow management remains a strong aspect of Conagra's financial health.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
11.74B	12.05B	12.28B	11.54B	11.18B	11.05B
	Gross Profit
3.10B	3.33B	3.26B	2.84B	3.18B	3.07B
	EBIT
514.70M	852.80M	1.08B	1.35B	1.78B	1.45B
	EBITDA
1.22B	1.45B	1.69B	1.94B	2.22B	1.85B
	Net Income Common Stockholders
329.10M	347.20M	683.60M	888.20M	1.30B	840.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
49.40M	77.70M	93.30M	83.30M	79.20M	553.30M
	Total Assets
20.74B	20.86B	22.05B	22.44B	22.20B	22.30B
	Total Debt
8.15B	8.61B	9.42B	9.18B	9.19B	9.95B
	Net Debt
8.10B	8.54B	9.33B	9.10B	9.11B	9.40B
	Total Liabilities
11.97B	12.35B	13.25B	13.57B	13.56B	14.35B
	Stockholders Equity
8.78B	8.44B	8.74B	8.79B	8.55B	7.88B
Cash Flow		Free Cash Flow
1.45B	1.63B	633.20M	712.90M	961.70M	1.47B
	Operating Cash Flow
1.83B	2.02B	995.40M	1.18B	1.47B	1.84B
	Investing Cash Flow
-536.60M	-375.00M	-354.90M	-434.90M	-340.30M	-153.80M
	Financing Cash Flow
-1.32B	-1.66B	-631.60M	-738.00M	-1.61B	-1.37B

Conagra Brands Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 22.48
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAG, the sentiment is Negative. The current price of 22.48 is below the 20-day moving average (MA) of 23.45, below the 50-day MA of 24.68, and below the 200-day MA of 26.82, indicating a bearish trend. The MACD of -0.58 indicates Positive momentum. The RSI at 34.42 is Neutral, neither overbought nor oversold. The STOCH value of 44.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CAG.

Conagra Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PPC	75 Outperform	$12.14B	10.03	36.53%	―	2.35%	145.82%
GIS	70 Outperform	$30.00B	12.03	27.37%	4.38%	-2.62%	4.27%
CAG	68 Neutral	$11.02B	33.79	3.67%	6.06%	-3.15%	-65.38%
MKC	67 Neutral	$19.90B	25.48	14.73%	2.34%	0.40%	10.89%
CPB	66 Neutral	$10.64B	20.56	13.43%	4.26%	9.15%	-31.94%
Sector *	64 Neutral	$8.88B	14.67	4.78%	173.89%	3.39%	2.18%
SJM	55 Neutral	$12.23B	22.22	-3.55%	3.74%	7.07%	-181.54%

Conagra Brands Corporate Events

Conagra Brands Sells Chef Boyardee for $600 Million

On May 1, 2025, Conagra Brands announced the sale of its Chef Boyardee shelf-stable product line to Hometown Food Company for $600 million in cash, expected to close in the first quarter of fiscal year 2026. This divestiture is part of Conagra’s strategy to reshape its portfolio for long-term growth and focus on its frozen and healthy-snacking businesses, while using the proceeds to pay down debt. The transaction, contributing approximately $450 million to fiscal 2024 net sales, is anticipated to be four percent dilutive to adjusted earnings per share if completed at the start of fiscal year 2025.