Back to top

Analyst Blog

Zacks Equity Research

Should ConAgra (CAG) Stock Be Part of Your Portfolio Now?

DPS DF SAFM CAG

Trades from $3

On Nov 14, 2016, Zacks Investment Research downgraded ConAgra Foods, Inc. (CAG - Free Report) to a Zacks Rank #3 (Hold) from a Zacks Rank #2 (Buy). Going by the Zacks model, companies with a Zacks Rank #3 are likely to perform in line with the broader market over the next few quarters.

Existing Scenario

On Nov 10, 2016, ConAgra successfully divested its Lamb Weston business arm on the wake of becoming a high performing flexible organization. In order to capture the growing market demand for frozen potato products, the company has been undertaking various measures to reinforce its Lamb Weston trade.

For instance, the company’s $200 million Lamb Weston Richmond facility investment and the Lamb Weston/Meijer deal inked with Belaya Dacha, in Jun 2016, are expected to boost revenues going ahead. Notably, higher revenues and lower expenses are estimated to bolster the company’s margin growth trajectory in the quarters ahead. In addition to this, ConAgra’s latest acquisitions are likely to drive both the top and bottom lines over the long term.

Despite the above mentioned bullish aspects, we believe that ConAgra’s growth prospects might be partially offset due to certain headwinds.

The Zacks Rank #3 stock conducts its business in a highly competitive market. Stiff industry rivalry not only exposes the company to risks of margin loss, but also compels it to incur lofty research & development projects. We even notice that the appreciating U.S. currency has been weighing over the company’s international sales and increasing the competitive power of its smaller rivals in low cost nations.

CONAGRA BRANDS Price and EPS Surprise

 

CONAGRA BRANDS Price and EPS Surprise | CONAGRA BRANDS Quote

Over the last 30 days, the Zacks Consensus Estimate for this Zacks Rank #3 stock has been revised downward for both fiscal 2017 and 2018. Share price of the company was $34.93 per share as of Nov 11, 2016.

Stocks to Consider

Some better-ranked stocks within the industry include:

Sanderson Farms, Inc. (SAFM - Free Report) currently sports a Zacks Rank #1 (Strong Buy) and has an average positive earnings surprise of 25.01% over the four trailing quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dean Foods Company (DF - Free Report) currently carries a Zacks Rank #2 and has an average positive earnings surprise of 5.43% over the last four quarters.

Dr Pepper Snapple Group, Inc. (DPS - Free Report) currently carries a Zacks Rank #2 and has an average positive earnings surprise of 5.45% over the trailing four quarters.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>


In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

DR PEPPER SNAPL (DPS) - free report >>

DEAN FOODS CO (DF) - free report >>

SANDERSON FARMS (SAFM) - free report >>

CONAGRA BRANDS (CAG) - free report >>