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Conagra Brands operates as a consumer-packaged goods food company primarily in the United States. The company offers both shelf-stable and temperature-controlled food products, as well as branded and customized products including entrees, sauces, and other culinary items.
Founded in 1919 and headquartered in Chicago, Illinois, Conagra maintains a diverse product portfolio and incorporates alterations within it as per the preference pattern of its customers. Some iconic brands of the company are Birds Eye, Duncan Hines, Healthy Choice, Marie Callender's, Reddi-wip, Slim Jim, Angie's, BOOMCHICKAPOP and many more.
Despite a legacy of crafting exceptional food with an unwavering commitment to innovation, Conagra faces mounting challenges across its operations driven by persistent cost inflation, soft volumes and unfavorable operating leverage. Profitability continues to erode and margin pressure is expected to deepen in the near-term.
The company’s Foodservice segment remains under strain due to weak demand and limited recovery in commercial traffic, while international operations suffer from adverse currency movements. Management has offered a strategic vision focused on frozen products and snacks, but short-term guidance reflects muted sales growth, shrinking margins and declining earnings.
The Zacks Rundown
A Zacks Rank #5 (Strong Sell) stock, Conagra Brands (CAG - Free Report) is a component of the Zacks Food – Miscellaneous industry group, which currently ranks in the bottom 27% out of approximately 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months, just as it has over the past few months:
Image Source: Zacks Investment Research
Stocks in the bottom tiers of industries can often be intriguing short candidates. While individual stocks have the ability to outperform even when they’re part of a lagging industry, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
CAG shares have been underperforming the market over the past year. The stock is hitting a series of lower lows and represents a compelling short opportunity as we head further into the second half of 2025.
Recent Earnings Misses & Deteriorating Outlook
Conagra Brands has fallen short of earnings estimates in three of the past four quarters. Back in July, the company reported fiscal fourth-quarter earnings of 56 cents per share, missing the Zacks Consensus Estimate by -5.1%.
Conagra has posted a trailing four-quarter average earnings miss of -3.6%. Consistently falling short of earnings estimates is a recipe for underperformance, and CAG is no exception.
The company has been on the receiving end of negative earnings estimate revisions as of late. Looking at the current quarter, analysts have slashed estimates by -26% in the past 60 days. The fiscal Q1 Zacks Consensus EPS Estimate is now $0.37 per share, reflecting negative growth of -30.2% relative to the year-ago period.
Image Source: Zacks Investment Research
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
Technical Outlook
As illustrated below, CAG stock is in a sustained downtrend. Notice how the stock has made a series of lower lows, widely underperforming the major indices. Also note that shares are trading below a downward-sloping 200-day (red line) moving average – another good sign for the bears.
Image Source: StockCharts
CAG stock has experienced what is known as a “death cross,” whereby the stock’s 50-day moving average (blue line) crosses below its 200-day moving average. Shares would have to make an outsized move to the upside and show increasing earnings estimate revisions to warrant taking any long positions. The stock has fallen more than 25% this year alone.
Final Thoughts
Continued macroeconomic uncertainty, tariffs and inflation further cloud the outlook, leaving execution risk elevated and investor confidence tested.
A deteriorating fundamental and technical backdrop show that this stock is not set to make its way to new highs anytime soon. The fact that CAG is included in one of the worst-performing industry groups adds yet another headwind to a long list of concerns.
A history of earnings misses and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of CAG until the situation shows major signs of improvement.
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Bear of the Day: Conagra Brands (CAG)
Conagra Brands operates as a consumer-packaged goods food company primarily in the United States. The company offers both shelf-stable and temperature-controlled food products, as well as branded and customized products including entrees, sauces, and other culinary items.
Founded in 1919 and headquartered in Chicago, Illinois, Conagra maintains a diverse product portfolio and incorporates alterations within it as per the preference pattern of its customers. Some iconic brands of the company are Birds Eye, Duncan Hines, Healthy Choice, Marie Callender's, Reddi-wip, Slim Jim, Angie's, BOOMCHICKAPOP and many more.
Despite a legacy of crafting exceptional food with an unwavering commitment to innovation, Conagra faces mounting challenges across its operations driven by persistent cost inflation, soft volumes and unfavorable operating leverage. Profitability continues to erode and margin pressure is expected to deepen in the near-term.
The company’s Foodservice segment remains under strain due to weak demand and limited recovery in commercial traffic, while international operations suffer from adverse currency movements. Management has offered a strategic vision focused on frozen products and snacks, but short-term guidance reflects muted sales growth, shrinking margins and declining earnings.
The Zacks Rundown
A Zacks Rank #5 (Strong Sell) stock, Conagra Brands (CAG - Free Report) is a component of the Zacks Food – Miscellaneous industry group, which currently ranks in the bottom 27% out of approximately 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months, just as it has over the past few months:
Image Source: Zacks Investment Research
Stocks in the bottom tiers of industries can often be intriguing short candidates. While individual stocks have the ability to outperform even when they’re part of a lagging industry, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
CAG shares have been underperforming the market over the past year. The stock is hitting a series of lower lows and represents a compelling short opportunity as we head further into the second half of 2025.
Recent Earnings Misses & Deteriorating Outlook
Conagra Brands has fallen short of earnings estimates in three of the past four quarters. Back in July, the company reported fiscal fourth-quarter earnings of 56 cents per share, missing the Zacks Consensus Estimate by -5.1%.
Conagra has posted a trailing four-quarter average earnings miss of -3.6%. Consistently falling short of earnings estimates is a recipe for underperformance, and CAG is no exception.
The company has been on the receiving end of negative earnings estimate revisions as of late. Looking at the current quarter, analysts have slashed estimates by -26% in the past 60 days. The fiscal Q1 Zacks Consensus EPS Estimate is now $0.37 per share, reflecting negative growth of -30.2% relative to the year-ago period.
Image Source: Zacks Investment Research
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
Technical Outlook
As illustrated below, CAG stock is in a sustained downtrend. Notice how the stock has made a series of lower lows, widely underperforming the major indices. Also note that shares are trading below a downward-sloping 200-day (red line) moving average – another good sign for the bears.
Image Source: StockCharts
CAG stock has experienced what is known as a “death cross,” whereby the stock’s 50-day moving average (blue line) crosses below its 200-day moving average. Shares would have to make an outsized move to the upside and show increasing earnings estimate revisions to warrant taking any long positions. The stock has fallen more than 25% this year alone.
Final Thoughts
Continued macroeconomic uncertainty, tariffs and inflation further cloud the outlook, leaving execution risk elevated and investor confidence tested.
A deteriorating fundamental and technical backdrop show that this stock is not set to make its way to new highs anytime soon. The fact that CAG is included in one of the worst-performing industry groups adds yet another headwind to a long list of concerns.
A history of earnings misses and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of CAG until the situation shows major signs of improvement.