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3 Food Stocks Bargain Hunters Wouldn't Want to Miss Buying Now

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The current market volatility has caused bargain hunters to look for safe spots with the potential to generate great returns. Come 2023 and the increased inflationary landscape, food stocks with efficient pricing and saving strategies will likely do well. As we are about to wrap up 2022, we have pointed out a few food stocks that look well placed for the new year, thanks to favorable demand and solid pricing strategies.

Increased at-home consumption habits formed since the pandemic has been working for the retail operations of several food companies. Their foodservice businesses have also been witnessing higher sales, with people heading out and returning to routine. The companies have been making the most of the rising demand through constant brand-building efforts, including consumer-centric innovation and acquisitions. Companies have been particularly investing in healthy offerings, given consumers’ rising inclination toward health and wellness (all the more since the pandemic).

Additionally, companies have been going all out to battle inflationary headwinds. Food companies have been grappling with an increased cost of ingredients, packaging and transportation. The increased cost of labor due to shortages has also been a downside. Players have been raising product prices and undertaking stronger saving and restructuring measures to combat these challenges.

All said, we have picked three well-ranked food stocks with a market cap of at least $1 billion using the Zacks Stock Screener. These stocks also flaunt a Value Score of A, making them all the more appetizing. With strong fundamentals and robust potential, these food stocks are likely to add flavor to investors’ new year palettes.

Zacks Investment Research
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3 Delicacies for 2023

Conagra Brands, Inc. (CAG - Free Report) is worth a shot. The company, with a market cap of $18.5 billion, has been benefiting from its efficient pricing and ongoing execution of the Conagra Way playbook. Strength in the frozen and snacks categories and recovery in the foodservice business has been aiding Conagra. CAG unveiled an additional price increase to counter inflation, which will be effective in the second quarter of fiscal 2023. We believe that efficient pricing and innovation are likely to drive sales in fiscal 2023.

For fiscal 2023, organic net sales are anticipated to rise 4-5% year over year. The adjusted EPS growth is envisioned at 1-5%. The Zacks Consensus Estimate for Conagra’s fiscal 2023 earnings per share has increased a penny to $2.48 over the past 30 days, suggesting growth of 3.8% from the year-ago reported figure. The Zacks Rank #2 (Buy) company’s shares have jumped 12.9% in the past six months. The company has a long-term EPS growth rate of 7.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archer Daniels Midland Company (ADM - Free Report) has seen its shares rise 20.6% in the past six months. On its third-quarter 2022 earnings call, management stated that ADM is well-poised to conclude 2022 on a solid note, continuing the momentum into 2023. The company’s third-quarter results were bolstered by robust global demand, gains from the integrated global value chain, a solid product portfolio and ADM’s team expertise in navigating dynamic market conditions.

Archer Daniels has been significantly progressing on its three strategic pillars — optimize, drive and growth. The Zacks Rank #2 company has been gaining from the robust performance in its Nutrition segment. The Zacks Consensus Estimate for ADM’s 2023 earnings per share has increased from $6.19 to $6.34 over the past 60 days. The company, with a market cap of $51.4 billion, has a long-term EPS growth rate of 7.2%.

Investors can also count on Ingredion Incorporated (INGR - Free Report) . The company raised its 2022 guidance when it posted solid third-quarter 2022 results.  The company, with a market cap of $6.4 billion has been benefiting from robust demand across core and specialty ingredients. Along with this, active price management across all regions has been helping INGR counter escalated input costs.

This Zacks Rank #2 stock has risen 11.3% in the past six months. The Zacks Consensus Estimate for Ingredion Incorporated’s 2023 earnings per share has increased from $7.56 to $7.82 over the past 30 days, indicating growth of 10.8% from the year-ago reported figure.


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