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Conagra (CAG) Looks Tempting: Stock Up Nearly 20% in 3 Months
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Conagra Brands, Inc. (CAG - Free Report) appears in robust shape, with its shares up 19.3% in the past three months compared with the industry’s rise of 14.1%. The company has been benefiting from its strong pricing actions amid rising cost inflation.
Also, its Conagra Way playbook has been yielding positive results, as evident from Conagra’s second-quarter fiscal 2023 performance released on Jan 5. During the quarter, earnings and sales grew year over year and beat the Zacks Consensus Estimate.
Encouragingly, this Zacks Rank #1 (Strong Buy) company raised its fiscal 2023 guidance for organic sales, the adjusted operating margin and adjusted earnings per share (EPS) based on a robust first-half show and sustained business momentum. The Zacks Consensus Estimate for the current fiscal-year EPS has risen from $2.45 to $2.62 over the past seven days.
Conagra’s splendid second-quarter fiscal 2023 results reflect the strength of the company’s brands and the ongoing execution of the Conagra Way playbook, evident from the significant top line. CAG delivered improved service levels and productivity, which, along with its efforts to combat inflation, helped it sail through inflationary pressures and industry-wide supply-chain hurdles. Every segment registered growth in the adjusted operating margin.
Conagra’s quarterly adjusted EPS came in at 81 cents, beating the Zacks Consensus Estimate of 66 cents. The bottom line increased 38.6% year over year. This can be attributed to the solid gross profit and the impressive performance of the company’s Ardent Mills joint venture.
Conagra generated net sales of $3,312.9 million, which advanced 8.3% year over year. The figure surpassed the Zacks Consensus Estimate of $3,269 million. The year-over-year sales increase resulted from higher organic sales.
For fiscal 2023, organic net sales are anticipated to rise 7-8%, up from the prior view of 4-5% growth. The adjusted operating margin is anticipated at 15.3-15.6%, up from the around 15% projected earlier. Management now envisions adjusted EPS in the $2.60-$2.70 band, suggesting 10-14% year-over-year growth. The adjusted EPS growth was earlier envisioned at 1-5%.
Key Upsides
Conagra’s efficient pricing initiatives have been offering respite amid cost headwinds. In the second quarter of fiscal 2023, the price/mix improved by 17% and aided the organic sales growth of 8.6%. The favorable price/mix was backed by CAG’s inflation-induced pricing actions.
The price/ mix rose 18.4%, 16%, 12.8% and 18.2% in the Grocery & Snacks, Refrigerated & Frozen, International and Foodservice segments, respectively. The continuation of these upsides is likely to work well for Conagra amid cost inflation.
Conagra’s key frozen and snacks categories remained particularly strong in the second quarter of fiscal 2023, witnessing a solid share performance. Net sales grew 10.5% to $1,421.5 million in the Refrigerated and Frozen segment.
Organic sales also rose 10.5% on the price/mix increase. The company saw an improved share in frozen single-serve meals, plant-based protein and frozen breakfasts.
Campbell Soup, which manufactures and markets food and beverage products, currently sports a Zacks Rank of 1. CPB has a trailing four-quarter earnings surprise of 8.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
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.
Ingredion, which produces and sells starches and sweeteners, currently carries a Zacks Rank #2 (Buy). Ingredion’s shares have rallied 19.4% in the past three months. The Zacks Consensus Estimate for INGR’s current financial-year EPS suggests an increase of 5.9% from the year-ago reported number.
Nomad Foods, a frozen food product company, currently carries a Zacks Rank #2. NOMD has a trailing four-quarter earnings surprise of 11.5%, on average. Nomad Foods’ shares have increased 22.6% in the past three months.
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Conagra (CAG) Looks Tempting: Stock Up Nearly 20% in 3 Months
Conagra Brands, Inc. (CAG - Free Report) appears in robust shape, with its shares up 19.3% in the past three months compared with the industry’s rise of 14.1%. The company has been benefiting from its strong pricing actions amid rising cost inflation.
Also, its Conagra Way playbook has been yielding positive results, as evident from Conagra’s second-quarter fiscal 2023 performance released on Jan 5. During the quarter, earnings and sales grew year over year and beat the Zacks Consensus Estimate.
Encouragingly, this Zacks Rank #1 (Strong Buy) company raised its fiscal 2023 guidance for organic sales, the adjusted operating margin and adjusted earnings per share (EPS) based on a robust first-half show and sustained business momentum. The Zacks Consensus Estimate for the current fiscal-year EPS has risen from $2.45 to $2.62 over the past seven days.
Conagra Brands Price, Consensus and EPS Surprise
Conagra Brands price-consensus-eps-surprise-chart | Conagra Brands Quote
Robust Q2 & Raised Guidance
Conagra’s splendid second-quarter fiscal 2023 results reflect the strength of the company’s brands and the ongoing execution of the Conagra Way playbook, evident from the significant top line. CAG delivered improved service levels and productivity, which, along with its efforts to combat inflation, helped it sail through inflationary pressures and industry-wide supply-chain hurdles. Every segment registered growth in the adjusted operating margin.
Conagra’s quarterly adjusted EPS came in at 81 cents, beating the Zacks Consensus Estimate of 66 cents. The bottom line increased 38.6% year over year. This can be attributed to the solid gross profit and the impressive performance of the company’s Ardent Mills joint venture.
Conagra generated net sales of $3,312.9 million, which advanced 8.3% year over year. The figure surpassed the Zacks Consensus Estimate of $3,269 million. The year-over-year sales increase resulted from higher organic sales.
For fiscal 2023, organic net sales are anticipated to rise 7-8%, up from the prior view of 4-5% growth. The adjusted operating margin is anticipated at 15.3-15.6%, up from the around 15% projected earlier. Management now envisions adjusted EPS in the $2.60-$2.70 band, suggesting 10-14% year-over-year growth. The adjusted EPS growth was earlier envisioned at 1-5%.
Key Upsides
Conagra’s efficient pricing initiatives have been offering respite amid cost headwinds. In the second quarter of fiscal 2023, the price/mix improved by 17% and aided the organic sales growth of 8.6%. The favorable price/mix was backed by CAG’s inflation-induced pricing actions.
The price/ mix rose 18.4%, 16%, 12.8% and 18.2% in the Grocery & Snacks, Refrigerated & Frozen, International and Foodservice segments, respectively. The continuation of these upsides is likely to work well for Conagra amid cost inflation.
Conagra’s key frozen and snacks categories remained particularly strong in the second quarter of fiscal 2023, witnessing a solid share performance. Net sales grew 10.5% to $1,421.5 million in the Refrigerated and Frozen segment.
Organic sales also rose 10.5% on the price/mix increase. The company saw an improved share in frozen single-serve meals, plant-based protein and frozen breakfasts.
Other Food Stocks to Grab
Some other top-ranked stocks are Campbell Soup (CPB - Free Report) , Ingredion Incorporated (INGR - Free Report) and Nomad Foods (NOMD - Free Report) .
Campbell Soup, which manufactures and markets food and beverage products, currently sports a Zacks Rank of 1. CPB has a trailing four-quarter earnings surprise of 8.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
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.
Ingredion, which produces and sells starches and sweeteners, currently carries a Zacks Rank #2 (Buy). Ingredion’s shares have rallied 19.4% in the past three months. The Zacks Consensus Estimate for INGR’s current financial-year EPS suggests an increase of 5.9% from the year-ago reported number.
Nomad Foods, a frozen food product company, currently carries a Zacks Rank #2. NOMD has a trailing four-quarter earnings surprise of 11.5%, on average. Nomad Foods’ shares have increased 22.6% in the past three months.