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Conagra Brand (CAG) to Post Q3 Earnings: Is a Beat in Store?

CVGW CAG SJM ARMK

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Conagra Brands, Inc. (CAG - Free Report) is scheduled to report third-quarter fiscal 2017 (ended Feb 2017) numbers before the opening bell on Mar 23.

Why a Likely Positive Surprise?

Our proven model shows that Conagra has the right combination of the two key ingredients.

Zacks ESP: Conagra has an Earnings ESP of +4.44%, as the Most Accurate estimate of 47 cents per share comes above the Zacks Consensus Estimate of 45 cents.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Conagra’s Zacks Rank #2 (Buy), when combined with a positive ESP, predicts a possible earnings beat. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We only caution against stocks with a Zacks Ranks #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

What is Driving the Better-Than-Expected Earnings?

Over the last one month, Conagra’s shares yielded a return of 1.56%, outperforming 0.20% gain recorded by the Zacks categorized Food - Miscellaneous industry.

Conagra divested its Lamb Weston business on Nov 10, 2016, in order to become a high-performing consumer branded food company. The divestiture proceeds were primarily utilized to fund the portfolio solidification and marketing programs of major brands under the company. These initiatives are likely to drive the company’s top-line performance in the to-be-reported quarter.

Moreover, higher revenues, reduced selling, general, and administrative (SG&A) expenses, and lower interest expense, resulting from low debt levels, are anticipated to boost earnings in the fiscal third quarter.

Other Stocks to Consider

Here are some other stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Aramark (ARMK - Free Report) , which has an Earnings ESP of +2.70% and a Zacks Rank #3 (Hold).

Calavo Growers, Inc. (CVGW - Free Report) , with an Earnings ESP of +1.52% and a Zacks Rank #3.

The J. M. Smucker Company (SJM - Free Report) , with an Earnings ESP of +0.58% and a Zacks Rank #3.

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