Conagra Brands (CAG) Valuation Check as Earnings Loom and Dividend Is Reaffirmed
Conagra Brands (CAG) just doubled down on its income story, with the board reaffirming a quarterly dividend of $0.35 per share even as Wall Street braces for weaker fiscal second quarter earnings.
See our latest analysis for Conagra Brands.
Those pressures have shown up in the market, with a steep year to date share price return of around minus 35 percent and a three year total shareholder return near minus 46 percent. This signals that momentum has been fading despite today’s modest bounce ahead of earnings.
If this kind of income story has you rethinking your watchlist, it might be worth scanning pharma stocks with solid dividends as a way to discover other high yielding names with different risk drivers.
With earnings expected to fall and the stock already trading at a steep discount to its historical performance, is Conagra now a beaten down value play, or is the market simply bracing for weaker growth ahead?
Most Popular Narrative: 11.4% Undervalued
With Conagra Brands last closing at $17.92 against a narrative fair value near $20.22, the prevailing view is that the market is underpricing future cash generation and margins.
Ongoing productivity improvements, equal to 4% of cost of goods sold, can offset inflationary pressures, supporting margin expansion and helping to boost net earnings.
Curious how modestly shrinking sales can still justify a richer future earnings multiple? The secret mix of margins, cash flow discipline, and valuation math might surprise you. Unlock the full narrative to see which assumptions really drive that upside case.
Result: Fair Value of $20.22 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, that upside case still hinges on navigating stubborn inflation and shifting consumer behavior, which could pressure margins and weaken already modest revenue expectations.
Find out about the key risks to this Conagra Brands narrative.
Build Your Own Conagra Brands Narrative
If the story does not quite fit your view, you can dive into the numbers yourself and build a custom narrative in minutes: Do it your way.
A great starting point for your Conagra Brands research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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