RBC maintains ConAgra shares at sector perform with $29 price target

Apr 1, 2024 11:10 pm | News

On Monday, RBC Capital maintained its Sector Perform rating on shares of ConAgra Brands, Inc. (NYSE:CAG), with a steady price target of $29.00.

The firm anticipates that the company will report earnings that align with expectations, noting potential challenges in the domestic retail sector which may be balanced by growth in International and Foodservice divisions. The analyst predicts that ConAgra will show sequential volume improvement, supported by increased promotional activities.

The firm expects the upcoming quarterly results to be satisfactory but does not foresee a significant upside. Looking ahead, RBC Capital would not be surprised if ConAgra reaffirms its guidance for the remainder of the fiscal year.

While acknowledging the progress ConAgra has made, the firm indicates that more substantial volume improvements in the snacks and frozen categories are necessary for greater confidence in the company’s potential to exceed the current fiscal year 2025 projections.

ConAgra Brands, known for its food and beverage products, has been working towards its fiscal year 2025 targets. The company’s efforts in enhancing volume growth are a key factor for analysts when assessing its stock potential. RBC Capital’s current stance reflects a wait-and-see approach, requiring further evidence of consistent improvements in key product areas before considering a more optimistic outlook.

ConAgra’s stock performance and future outlook remain a point of interest for investors, especially in light of the company’s strategic moves and market conditions. The reaffirmation of the Sector Perform rating indicates that RBC Capital views ConAgra as adequately valued at the moment, with future performance hinging on the company’s ability to drive volume growth in its strategic segments.

InvestingPro Insights

As ConAgra Brands (NYSE:CAG) navigates the current market, several key metrics from InvestingPro provide a deeper look into the company’s financial health and stock performance. With a market capitalization of $14.11 billion and a P/E ratio of 14.34, the company presents a value proposition that is underscored by a low earnings multiple relative to near-term earnings growth. The InvestingPro data indicates that ConAgra is trading at an adjusted P/E ratio of 10.87 for the last twelve months as of Q2 2024, which could suggest an attractive entry point for value-oriented investors.

Moreover, ConAgra has demonstrated a commitment to returning value to shareholders, with a high shareholder yield and a consistent dividend policy, having raised its dividend for 4 consecutive years and maintained payments for 49 consecutive years. This is complemented by a robust dividend yield of 4.72% and a dividend growth of 6.06% in the same period. These figures are particularly relevant for income-focused investors considering the current yield environment.

InvestingPro Tips highlight that ConAgra has a perfect Piotroski Score of 9, indicating strong financial health, and analysts predict the company will be profitable this year, already having been profitable over the last twelve months. For those interested in further analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/CAG. To enhance your investment research, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, granting access to a total of 9 InvestingPro Tips for ConAgra Brands.

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