Conagra's (CAG) Growth Prospects Bright Amid Margin Pressure
Zacks Investment Research | Jun 14, 2018 10:00PM ET
On Jun 15, we issued an updated research report on premium consumer goods company Conagra Brands, Inc. (NYSE:CAG) .
Inside Story
Conagra expects that its unique value-over-volume strategy will help boost the company's top line in the upcoming quarters. Under this, the company ensures that its robust volume performance is not driven by price discounts but by stronger innovation, as well as new merchandising, distribution and consumer trail-related investments. For instance, new investments to strengthen the frozen products business will likely drive the Refrigerated & Frozen segment’s sales, going forward. On the other hand, brand-renovation initiatives executed to reinforce the snacks business will likely aid in improving Grocery & Snacks segment’s near-term sales. Per our estimates, the company’s sales are projected to be up 1.7% in fiscal 2019 (ending May 2019).
Moreover, the company expects that robust top-line growth, share-repurchase activities, lower tax rates and divestiture of low margin businesses will likely continue to improve its bottom line in the upcoming quarters. The company currently projects earnings of $2.03-$2.05 per share in fiscal 2018 (ended May 2018), higher than the prior view of $1.84-$1.89 per share.
Additionally, Conagra intends to boost its competency by reshaping the company’s portfolio through strategic inorganic moves. For instance, the acquisition of Angie's Artisan Treats, LLC (completed in October 2017) has been strengthening the company’s snacking business. Furthermore, the Sandwich Bros. buyout (completed in February 2018) has been fortifying its frozen products business.
The company also remains on track to boost shareholders’ remuneration on the back of dividends and share-buyback offers.
Over the last three months, shares of this Zacks Rank #3 (Hold) company have rallied 4.3%, as against the 3.7% loss incurred by the Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.