On Oct 5, 2016, Zacks Investment Research upgraded ConAgra Foods, Inc. (CAG - Free Report) to a Zacks Rank #2 (Buy) from a Zacks Rank #3 (Hold). Going by the Zacks model, companies with a Zacks Rank #2 are likely to perform better than the broader market over the next few quarters.
Why the Upside?
ConAgra posted strong earnings in first-quarter fiscal 2017 (ended Aug 28, 2016). The bottom line benefited from robust frozen potato products’ sales, lower operating expenses and lesser interest expense resulting from lower debt.
The company has been making new investments to further expand its Lamb Weston trade. This will aid it in capturing the rising market demand for frozen potato products.
ConAgra is undergoing rigorous structural changes for improving its revenues and margins. The company is divesting its less profitable businesses and acquiring new brands to boost its top line. In sync with this strategy, the company intends to complete the divestiture of its Lamb Weston business, by the fall of fiscal 2017. This will result in the formation of two separate pure play public companies – ConAgra Brands and Lamb Weston.
Over the last 30 days, the Zacks Consensus Estimate for this Zacks Rank #2 stock has been revised upward by 3.8% for fiscal 2017 and 1.5% fiscal 2018.
Share price of the company was $47.15 per share as of Oct 5, 2016. The stock gained roughly 1.9%, since the release of its fiscal first quarter results on Sep 29, 2016.
Other Stocks to Consider
Some other favorably placed stocks within the industry are listed below:
US Foods Holding Corp. (USFD - Free Report) presently sports a Zacks Rank #1 (Strong Buy). Over the last 60 days, the Zacks Consensus Estimate for the stock has moved up by 9.2% for 2016. You can see the complete list of today’s Zacks #1 Rank stocks here.
Aramark (ARMK - Free Report) and The Kraft Heinz Co. (KHC - Free Report) currently carry a Zacks Rank #2. The Zacks Consensus Estimate for Aramark has inched up by 1.3% for fiscal 2016, over the past two months. The Zacks Consensus Estimate for The Kraft Heinz Company has climbed by 2.2% for 2016, over the same time period.
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