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Conagra (CAG) Braves Headwinds with Robust Growth Drivers
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On Jul 4, we issued an updated research report on premium consumer goods company, Conagra Brands, Inc. (CAG - Free Report) .
Existing Scenario
Increasing demand for on-trend consumer products offered under premium brands, such as Peter Pan, Healthy Choice, Blakes, Frontera, Hunts and Dukes, is likely to bolster Conagra’s aggregate sales in the quarters ahead. Moreover, the company’s innovation investments made to enhance the product portfolio are expected to drive near-term top-line performances. For instance, the latest Power Bowls rolled out under Healthy Choice (May 2017) is likely to secure sturdy market response, starting this August.
Additionally, divestment of the low-margin generating J.W. Swank and Spicetec Flavors & Seasonings businesses (closed in Jul 2016), as well as the successful spin-off of the Wesson brand will likely boost the company’s profitability, moving ahead.
Also, Conagra’s volume strategy, favorable pricing, supply-chain productivity, increased share repurchase, lowered interest expense as a result of reduced debt burden, and higher profitability accrued from the Ardent Mills joint-venture business are projected to boost earnings in the near term.
However, over the last 30 days, the Zacks Consensus Estimate for Conagra has been revised downward for both fiscal 2018 and 2019, reflecting negative sentiments toward this Zacks Rank #3 (Hold) stock. Notably, over the last one month, Conagra’s shares lost 9.99%, wider than the loss of 6.69% incurred by the Food - Miscellaneous industry.
Conagra intends to bolster its revenues and margins on the back of increased business internationalization. However, international operations expose the company to several economic, political and environmental headwinds. In fourth-quarter fiscal 2017, foreign currency translation impact adversely affected the company’s International segment revenues by 3.5%. Conagra noted that adverse foreign currency translation impact might continue to thwart the segment’s near-term performance.
We also believe that headwinds such as stiff industry rivalry or price inflation of major inputs, such as soybeans, pork, oats, beef, poultry, wheat, and corn, might dent the company’s profitability, going ahead.
Stocks to Consider
Some better-ranked stocks in the industry are listed below:
B&G Foods, Inc. (BGS - Free Report) , which also has a Zacks Rank #2 at present, pulled off an average positive earnings surprise of 1.95% over the last four quarters.
Inter Parfums, Inc. (IPAR - Free Report) currently holds a Zacks Rank #2 and has an average positive earnings surprise of 15.58% for the last four quarters.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>
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Conagra (CAG) Braves Headwinds with Robust Growth Drivers
On Jul 4, we issued an updated research report on premium consumer goods company, Conagra Brands, Inc. (CAG - Free Report) .
Existing Scenario
Increasing demand for on-trend consumer products offered under premium brands, such as Peter Pan, Healthy Choice, Blakes, Frontera, Hunts and Dukes, is likely to bolster Conagra’s aggregate sales in the quarters ahead. Moreover, the company’s innovation investments made to enhance the product portfolio are expected to drive near-term top-line performances. For instance, the latest Power Bowls rolled out under Healthy Choice (May 2017) is likely to secure sturdy market response, starting this August.
Additionally, divestment of the low-margin generating J.W. Swank and Spicetec Flavors & Seasonings businesses (closed in Jul 2016), as well as the successful spin-off of the Wesson brand will likely boost the company’s profitability, moving ahead.
Also, Conagra’s volume strategy, favorable pricing, supply-chain productivity, increased share repurchase, lowered interest expense as a result of reduced debt burden, and higher profitability accrued from the Ardent Mills joint-venture business are projected to boost earnings in the near term.
However, over the last 30 days, the Zacks Consensus Estimate for Conagra has been revised downward for both fiscal 2018 and 2019, reflecting negative sentiments toward this Zacks Rank #3 (Hold) stock. Notably, over the last one month, Conagra’s shares lost 9.99%, wider than the loss of 6.69% incurred by the Food - Miscellaneous industry.
Conagra intends to bolster its revenues and margins on the back of increased business internationalization. However, international operations expose the company to several economic, political and environmental headwinds. In fourth-quarter fiscal 2017, foreign currency translation impact adversely affected the company’s International segment revenues by 3.5%. Conagra noted that adverse foreign currency translation impact might continue to thwart the segment’s near-term performance.
We also believe that headwinds such as stiff industry rivalry or price inflation of major inputs, such as soybeans, pork, oats, beef, poultry, wheat, and corn, might dent the company’s profitability, going ahead.
Stocks to Consider
Some better-ranked stocks in the industry are listed below:
Aramark (ARMK - Free Report) generated an average positive earnings surprise of 4.45% over the trailing four quarters and currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
B&G Foods, Inc. (BGS - Free Report) , which also has a Zacks Rank #2 at present, pulled off an average positive earnings surprise of 1.95% over the last four quarters.
Inter Parfums, Inc. (IPAR - Free Report) currently holds a Zacks Rank #2 and has an average positive earnings surprise of 15.58% for the last four quarters.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>