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Conagra Brands, Inc. (CAG - Free Report) has been fighting inflation over the last year. This Zacks Rank #5 (Strong Sell) recently guided below the Zacks Consensus for fiscal 2024.
Conagra is a food company with many iconic brands including Birds Eye, Duncan Hines, Healthy Choice, Marie Callender's, Reddi-wip, Slim Jim, as well as emerging brands Angie's Boomchickapop, Duke's, Earth Balance and Frontera.
A Beat in Fiscal Fourth Quarter 2024
On July 13, 2023, Conagra reported its fiscal fourth quarter and full year 2023 earnings and beat on the Zacks Consensus by $0.02. It reported $0.62 versus the Consensus of $0.60. It was the sixth earnings beat in a row.
Organic net sale rose 2.2% while adjusted operating margin decreased 39 basis points to 14.6%.
Conagra was able to institute inflation-driven pricing action in most of its segments even as volumes declined.
For the full fiscal year 2023, adjusted EPS increased 17.4% to $2.77, driven by an increase in adjusted operating profit. Free cash flow was also $633 million for the year.
Guided Full Year 2024 Below Consensus
Conagra provided fiscal 2024 guidance and it was below the Zacks Consensus. It gave a an earnings forecast of $2.70 to $2.75.
7 estimates were cut for 2024 as a result. The Zacks Consensus Estimate fell to $2.72 from $2.83 over the last 30 days to get within the guidance range.
This is an earnings decline of 1.8% year-over-year as it made $2.77 in fiscal 2023.
On inflation, Conagra expects cost of goods sold inflation to continue into fiscal 2024. The company's guidance anticipates net inflation (input cost inflation including the impacts of hedging and other sourcing benefits) to be roughly 3%.
Shares Sink in 2023
While the stock market rallies in 2023, Conagra shares have gone the opposite way, sinking 14.1% year-to-date.
Image Source: Zacks Investment Research
Conagra is cheap. It's trading at 12.2x forward earnings.
It's also shareholder friendly and is spending some of that free cash flow on dividends. It recently increased the annual dividend by 6% rate beginning on the payout on Aug 31, 2023. The dividend will jump to $1.40 from $1.32. That's a yield of 4.2%.
For those interested in food companies, you might want to keep Conagra on the watch list for positive revisions to those earnings estimates.
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Bear of the Day: Conagra (CAG)
Conagra Brands, Inc. (CAG - Free Report) has been fighting inflation over the last year. This Zacks Rank #5 (Strong Sell) recently guided below the Zacks Consensus for fiscal 2024.
Conagra is a food company with many iconic brands including Birds Eye, Duncan Hines, Healthy Choice, Marie Callender's, Reddi-wip, Slim Jim, as well as emerging brands Angie's Boomchickapop, Duke's, Earth Balance and Frontera.
A Beat in Fiscal Fourth Quarter 2024
On July 13, 2023, Conagra reported its fiscal fourth quarter and full year 2023 earnings and beat on the Zacks Consensus by $0.02. It reported $0.62 versus the Consensus of $0.60. It was the sixth earnings beat in a row.
Organic net sale rose 2.2% while adjusted operating margin decreased 39 basis points to 14.6%.
Conagra was able to institute inflation-driven pricing action in most of its segments even as volumes declined.
For the full fiscal year 2023, adjusted EPS increased 17.4% to $2.77, driven by an increase in adjusted operating profit. Free cash flow was also $633 million for the year.
Guided Full Year 2024 Below Consensus
Conagra provided fiscal 2024 guidance and it was below the Zacks Consensus. It gave a an earnings forecast of $2.70 to $2.75.
7 estimates were cut for 2024 as a result. The Zacks Consensus Estimate fell to $2.72 from $2.83 over the last 30 days to get within the guidance range.
This is an earnings decline of 1.8% year-over-year as it made $2.77 in fiscal 2023.
On inflation, Conagra expects cost of goods sold inflation to continue into fiscal 2024. The company's guidance anticipates net inflation (input cost inflation including the impacts of hedging and other sourcing benefits) to be roughly 3%.
Shares Sink in 2023
While the stock market rallies in 2023, Conagra shares have gone the opposite way, sinking 14.1% year-to-date.
Image Source: Zacks Investment Research
Conagra is cheap. It's trading at 12.2x forward earnings.
It's also shareholder friendly and is spending some of that free cash flow on dividends. It recently increased the annual dividend by 6% rate beginning on the payout on Aug 31, 2023. The dividend will jump to $1.40 from $1.32. That's a yield of 4.2%.
For those interested in food companies, you might want to keep Conagra on the watch list for positive revisions to those earnings estimates.