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Conagra Brands (CAG) Up More Than 10% in 3 Months: Here's Why
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Conagra Brands, Inc. (CAG - Free Report) appears in a solid position, with its shares up 14% in the past three months compared with the industry’s rise of 11.2%. The consumer-packaged-goods food company has been benefiting from its efficient pricing efforts amid the rising cost inflation. Strength in the frozen business and gains from innovation have also been drivers.
The Zacks Consensus Estimate for the current fiscal-year earnings per share (EPS) has risen by a penny in the past seven days to $2.45. The consensus estimate for sales and EPS suggests a 5.8% and 3.8% increase from the year-ago period’s reported figures, respectively.
Factors Backing Conagra Brands
CAG’s efficient pricing initiatives have been offering respite amid cost headwinds. In the first quarter of fiscal 2023, the price/mix improved 14.3% and aided the organic sales growth of 9.7%. The favorable price/mix was backed by the company’s inflation-induced pricing actions. The Price/mix rose 16.6%, 12.1%, 8.4% and 18.8% in the Grocery & Snacks, Refrigerated & Frozen, International and Foodservice segments, respectively.
Conagra Brands’ frozen and snacks categories remained particularly strong in the first quarter of fiscal 2023, delivering solid profit growth. Net sales grew 9.6% to $1,207.6 million in the Refrigerated and Frozen segment. Organic sales also rose 9.6% on a price/mix increase of 12.1%. The company saw an improved share in frozen single-serve meals, plant-based protein and frozen breakfast.
Conagra Brands has been strongly committed to undertaking innovation, the key to its success. Prudent innovations have been helping the company to modernize its portfolio and meet consumers’ changing needs aptly.
Some of the company’s new products have been top-performing in several categories, such as toppings, plant-based protein and single-serve meals. Conagra Brands earlier said that it expects a sturdy performance from innovations in fiscal 2023.
Further, CAG is seeing recovery in its Foodservice business as restaurant traffic is picking up with pandemic-led curbs being lifted and rising outdoor movement. In the first quarter of fiscal 2023, the Foodservice segment’s sales advanced 14.6% to $274.9 million. The price/mix improved 18.8% on favorable inflation-driven pricing. With a continued rise in outdoor dining trends, the Foodservice business looks well-placed.
The Bottom Line
We believe that efficient pricing, together with innovation, is likely to aid this Zacks Rank #2 (Buy) company’s sales in fiscal 2023. Organic sales are likely to rise 4-5% in fiscal 2023. Adjusted EPS growth is envisioned in the range of 1-5%.
The Chef's Warehouse, which distributes specialty food products, currently sports a Zacks Rank #1 (Strong Buy). The Chef's Warehouse has a trailing four-quarter earnings surprise of 93.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CHEF’s current financial-year sales suggests an increase of 46.5% from the year-ago reported number, while earnings indicate significant growth.
Campbell Soup, which manufactures and markets food and beverage products, currently carries a Zacks Rank of 2. CPB has a trailing four-quarter earnings surprise of 8.7%, on average.
The Zacks Consensus Estimate for Campbell Soup’s current financial-year sales and earnings suggests growth of 8.3% and 4.6%, respectively, from the corresponding year-ago reported figures.
McCormick, a manufacturer, marketer and distributor of spices, seasoning mixes and condiments, currently carries a Zacks Rank #2. MKC delivered an earnings surprise of 6.2% in the last reported quarter.
The Zacks Consensus Estimate for McCormick’s current financial-year sales suggests growth of 1.8% from the year-ago reported figure.
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Conagra Brands (CAG) Up More Than 10% in 3 Months: Here's Why
Conagra Brands, Inc. (CAG - Free Report) appears in a solid position, with its shares up 14% in the past three months compared with the industry’s rise of 11.2%. The consumer-packaged-goods food company has been benefiting from its efficient pricing efforts amid the rising cost inflation. Strength in the frozen business and gains from innovation have also been drivers.
The Zacks Consensus Estimate for the current fiscal-year earnings per share (EPS) has risen by a penny in the past seven days to $2.45. The consensus estimate for sales and EPS suggests a 5.8% and 3.8% increase from the year-ago period’s reported figures, respectively.
Factors Backing Conagra Brands
CAG’s efficient pricing initiatives have been offering respite amid cost headwinds. In the first quarter of fiscal 2023, the price/mix improved 14.3% and aided the organic sales growth of 9.7%. The favorable price/mix was backed by the company’s inflation-induced pricing actions. The Price/mix rose 16.6%, 12.1%, 8.4% and 18.8% in the Grocery & Snacks, Refrigerated & Frozen, International and Foodservice segments, respectively.
Conagra Brands Price, Consensus and EPS Surprise
Conagra Brands price-consensus-eps-surprise-chart | Conagra Brands Quote
Conagra Brands’ frozen and snacks categories remained particularly strong in the first quarter of fiscal 2023, delivering solid profit growth. Net sales grew 9.6% to $1,207.6 million in the Refrigerated and Frozen segment. Organic sales also rose 9.6% on a price/mix increase of 12.1%. The company saw an improved share in frozen single-serve meals, plant-based protein and frozen breakfast.
Conagra Brands has been strongly committed to undertaking innovation, the key to its success. Prudent innovations have been helping the company to modernize its portfolio and meet consumers’ changing needs aptly.
Some of the company’s new products have been top-performing in several categories, such as toppings, plant-based protein and single-serve meals. Conagra Brands earlier said that it expects a sturdy performance from innovations in fiscal 2023.
Further, CAG is seeing recovery in its Foodservice business as restaurant traffic is picking up with pandemic-led curbs being lifted and rising outdoor movement. In the first quarter of fiscal 2023, the Foodservice segment’s sales advanced 14.6% to $274.9 million. The price/mix improved 18.8% on favorable inflation-driven pricing. With a continued rise in outdoor dining trends, the Foodservice business looks well-placed.
The Bottom Line
We believe that efficient pricing, together with innovation, is likely to aid this Zacks Rank #2 (Buy) company’s sales in fiscal 2023. Organic sales are likely to rise 4-5% in fiscal 2023. Adjusted EPS growth is envisioned in the range of 1-5%.
Other Food Stocks to Consider
Some other top-ranked stocks are The Chef's Warehouse (CHEF - Free Report) , Campbell Soup (CPB - Free Report) and McCormick & Company (MKC - Free Report) .
The Chef's Warehouse, which distributes specialty food products, currently sports a Zacks Rank #1 (Strong Buy). The Chef's Warehouse has a trailing four-quarter earnings surprise of 93.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CHEF’s current financial-year sales suggests an increase of 46.5% from the year-ago reported number, while earnings indicate significant growth.
Campbell Soup, which manufactures and markets food and beverage products, currently carries a Zacks Rank of 2. CPB has a trailing four-quarter earnings surprise of 8.7%, on average.
The Zacks Consensus Estimate for Campbell Soup’s current financial-year sales and earnings suggests growth of 8.3% and 4.6%, respectively, from the corresponding year-ago reported figures.
McCormick, a manufacturer, marketer and distributor of spices, seasoning mixes and condiments, currently carries a Zacks Rank #2. MKC delivered an earnings surprise of 6.2% in the last reported quarter.
The Zacks Consensus Estimate for McCormick’s current financial-year sales suggests growth of 1.8% from the year-ago reported figure.