Conagra Brands, Inc.
CAG
$16.27
-2.40%
Conagra Brands, Inc. is a leading North American packaged food company, generating 91% of its revenue from the U.S. market across frozen foods (Marie Callender's, Healthy Choice, Banquet, Birds Eye), snacks, shelf-stable staples, and refrigerated products (Duncan Hines, Hunt's, Slim Jim, Vlasic, Orville Redenbacher's). As a major player in the consumer staples sector, Conagra competes with peers like Kraft Heinz and General Mills, leveraging a portfolio of iconic brands. The current investor narrative centers on a challenging turnaround: the company recently reported a massive Q4 loss, replaced its CEO, and faces a high dividend yield that signals distress, while management works to revitalize its product portfolio and navigate input cost inflation and shifting consumer spending.…
CAG
Conagra Brands, Inc.
$16.27
Related headlines
Investment Opinion: Should I buy CAG Today?
Rating: Hold. Conagra is a high-risk turnaround play with a deeply discounted valuation but significant operational and financial challenges. The analyst consensus is 'Hold' with an average target of $14.38, implying 12.5% downside from the current price of $16.43. The thesis is that the stock is cheap but not yet a compelling buy given the negative earnings and management uncertainty.
Sign up to view all
CAG 12-Month Price Forecast
The AI assessment is bearish due to the company's negative earnings, high leverage, and unsustainable dividend. The stock is trading above the average analyst target, suggesting limited upside. However, the deep valuation discount and recent revenue growth provide some hope. The stance would upgrade to neutral if the company posts positive EPS and maintains its dividend, and to bullish if margins expand and the new CEO delivers a credible turnaround plan.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Conagra Brands, Inc.'s 12-month outlook, with a consensus price target around $14.38 and implied upside of -11.6% versus the current price.
Average Target
$14.38
0 analysts
Implied Upside
-11.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$12 - $23
Analyst target range
The target price range spans from $12.00 to $23.00, with the average at $14.38. The high target of $23.00 assumes a successful turnaround, with margin recovery and multiple expansion, while the low target of $12.00 prices in continued operational struggles and potential dividend cuts. Recent institutional actions show a mix of neutral stances (Barclays Overweight, RBC Sector Perform, Deutsche Bank Hold) and some bearish moves (Bernstein downgrade to Underperform, Wells Fargo Underweight). The wide spread between the low and high targets signals high uncertainty, and the consensus 'Hold' rating suggests analysts are waiting for clearer signs of improvement before becoming more constructive.
Bulls vs Bears: CAG Investment Factors
Conagra presents a classic value trap versus turnaround opportunity. The bull case rests on a deeply discounted valuation (PS 0.56 vs. 1.5x industry) and recent revenue growth, while the bear case is anchored by a massive Q4 loss, high leverage, and a dividend yield that screams distress. Currently, the bearish evidence is stronger given the negative earnings, debt burden, and management upheaval. The single most important tension is whether the new CEO can execute a successful portfolio revitalization and margin recovery—if they can, the stock could re-rate significantly; if not, further downside toward the 52-week low of $12.53 is likely.
Bullish
- Deep valuation discount to peers: CAG trades at a price-to-sales ratio of 0.56, versus an industry average of approximately 1.5x, and a forward P/E of 10.59. This implies the market is pricing in significant operational distress, offering potential upside if the turnaround succeeds.
- Recent revenue growth acceleration: Q4 FY2026 revenue grew 3.61% year-over-year to $2.882 billion, the strongest quarterly growth in the past year. This suggests that price increases and portfolio adjustments are beginning to offset volume declines.
- Strong free cash flow generation: Trailing twelve-month free cash flow stands at $842 million, providing a cushion for debt service and dividend payments. This cash flow supports the current dividend yield of 10.66%, though sustainability remains a concern.
- Potential for margin recovery: Gross margin in Q4 was 24.35%, down from 25.42% a year ago, but management's cost-saving initiatives and input cost stabilization could drive margin expansion. The forward P/E of 10.59 implies earnings recovery to ~$1.55 per share, which is plausible if margins revert to historical norms.
Bearish
- Massive Q4 loss and negative EPS: Q4 FY2026 reported a net loss of $1.617 billion, with EPS of -$3.37, driven by a $2.93 billion impairment charge. Trailing EPS is -$0.31, making the stock unprofitable on a trailing basis and raising questions about asset quality.
- High debt and leverage: Debt-to-equity ratio is 1.14, and the current ratio is 0.90, indicating potential liquidity stress. Interest expense of $94.1 million in Q4 consumes a significant portion of operating income, limiting financial flexibility.
- Dividend yield signals distress: The dividend yield of 10.66% is abnormally high, often a red flag for a potential dividend cut. The payout ratio is negative (-34.9%) due to negative earnings, making the dividend unsustainable without further debt or cash reserves.
- Underperformance and negative momentum: CAG's 1-year price change is -14.87%, versus the S&P 500's +20.48%. Relative strength over 1 year is -35.35%, indicating persistent underperformance. The stock remains 19% below its 52-week high of $20.32.
CAG Technical Analysis
Conagra's stock is in a pronounced downtrend over the past year, with a 1-year price change of -14.87%, significantly underperforming the S&P 500's +20.48% gain. The current price of $16.43 sits at 81% of its 52-week range (low $12.53, high $20.32), indicating the stock has partially recovered from its lows but remains well below its highs. This positioning suggests a stock that has been beaten down but is attempting to stabilize, though the longer-term trend remains bearish.
Beta
-0.05
-0.05x market volatility
Max Drawdown
-37.2%
Largest decline past year
52-Week Range
$13-$20
Price range past year
Annual Return
-15.1%
Cumulative gain past year
| Period | CAG Return | S&P 500 |
|---|---|---|
| 1m | +10.2% | +3.6% |
| 3m | +22.1% | +2.1% |
| 6m | -13.1% | +11.1% |
| 1y | -15.1% | +19.2% |
| ytd | -6.0% | +12.3% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
CAG Fundamental Analysis
Revenue growth has been modest but positive, with the most recent quarter (Q4 FY2026) showing revenue of $2.882 billion, up 3.61% year-over-year. However, this growth is inconsistent, as the prior quarter (Q3) saw revenue of $2.788 billion, and the company's full-year trajectory has been choppy, with Q1 and Q2 revenues of $2.633 billion and $2.979 billion, respectively. The growth is driven primarily by price increases rather than volume, as consumers trade down in a challenging economic environment. The company's revenue segments show a balanced mix, with Refrigerated and Frozen contributing $2.257 billion and Grocery and Snacks $2.234 billion, but overall growth is decelerating from the pandemic-era highs.
Quarterly Revenue
$2.9B
2026-05
Revenue YoY Growth
+3.6%
YoY Comparison
Gross Margin
24.3%
Latest Quarter
Free Cash Flow
$842000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is CAG Overvalued?
Given that Conagra's trailing twelve-month net income is negative (EPS of -$0.31), the price-to-earnings ratio is not meaningful, so I have selected the price-to-sales (PS) ratio as the primary valuation metric. The current PS ratio is 0.56, which is significantly lower than the industry average of approximately 1.5x for packaged food companies, indicating the stock is trading at a steep discount. The forward PE of 10.59 suggests the market expects earnings to recover, but the negative trailing earnings and high debt levels warrant caution.
PE
-3.3x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 8x~25x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
-8.2x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are severe. The company reported a Q4 net loss of $1.617 billion, driven by a $2.93 billion impairment, resulting in negative trailing EPS of -$0.31. Debt-to-equity stands at 1.14, and the current ratio of 0.90 indicates potential liquidity issues. Interest expense of $94.1 million in Q4 consumes a large portion of operating income, and the dividend yield of 10.66% is unsustainable given negative earnings and a payout ratio of -34.9%. Free cash flow of $842 million provides some cushion, but it may not be sufficient to cover debt maturities and dividend payments if earnings do not recover.