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Conagra Brands (CAG) Gains But Lags Market: What You Should Know

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Conagra Brands (CAG - Free Report) closed at $28.68 in the latest trading session, marking a +0.02% move from the prior day. This move lagged the S&P 500's daily gain of 1.5%. Elsewhere, the Dow gained 1.48%, while the tech-heavy Nasdaq added 1.95%.

Heading into today, shares of the packaged foods company had gained 4.25% over the past month, outpacing the Consumer Staples sector's loss of 0.62% and the S&P 500's loss of 4.19% in that time.

Wall Street will be looking for positivity from CAG as it approaches its next earnings report date. On that day, CAG is projected to report earnings of $0.40 per share, which would represent a year-over-year decline of 14.89%. Our most recent consensus estimate is calling for quarterly revenue of $2.48 billion, up 35.33% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.11 per share and revenue of $10.85 billion, which would represent changes of +4.98% and +13.72%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for CAG. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. CAG currently has a Zacks Rank of #3 (Hold).

In terms of valuation, CAG is currently trading at a Forward P/E ratio of 13.59. This represents a discount compared to its industry's average Forward P/E of 18.58.

Investors should also note that CAG has a PEG ratio of 1.94 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Food - Miscellaneous stocks are, on average, holding a PEG ratio of 2.51 based on yesterday's closing prices.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 151, which puts it in the bottom 42% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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