A Look At Conagra Brands (CAG) Valuation After A Year Of Weak Shareholder Returns

Conagra Brands (CAG) has come into focus for investors after recent trading left the shares at a last close of $17.30, prompting a fresh look at how its fundamentals line up with current pricing.

See our latest analysis for Conagra Brands.

Recent trading has been fairly muted, with a small 1-day share price return of around 0% and a 7-day share price return of roughly 1% decline, while the 1-year total shareholder return of about 31% decline points to fading longer term momentum despite a modest 1-month share price gain.

If Conagra’s recent weakness has you thinking about where else capital might work harder, it could be a good moment to check out other established US food and beverage peers, or broaden your search to consumer names screened for resilient balance sheets and cash flows using fast growing stocks with high insider ownership.

With Conagra posting flat near term moves, a 31% 1 year total return decline, and a value score of 4, the key question is whether today’s price reflects a discount or if the market already prices in any recovery potential.

Most Popular Narrative: 14.5% Undervalued

With Conagra Brands last closing at $17.30 against a narrative fair value of about $20.22, investors are weighing modest revenue assumptions against earnings power and valuation multiples.

The analysts have a consensus price target of $20.933 for Conagra Brands based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $26.0, and the most bearish reporting a price target of just $18.0.

Read the complete narrative.

Want to understand why a flat revenue outlook can still support a higher value? The narrative leans on margin shifts, earnings power, and a future P/E that sits well below many food peers. Curious which profit assumptions and discount rate tie those pieces together into a $20 plus fair value?

The most followed narrative applies a discount rate of about 7.0%, assumes subdued top line trends, and still arrives at a fair value above the current share price, largely by focusing on earnings, profitability and the multiple investors might be willing to pay a few years out. It also factors in how today’s P/E compares with the level required in future years for the valuation to line up with projected earnings, and contrasts that with current valuations across the broader US food industry.

Result: Fair Value of $20.22 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the story could change quickly if inflation, tariffs or new ingredient rules squeeze margins harder than expected, or if supply chain costs flare up again.

Find out about the key risks to this Conagra Brands narrative.

Build Your Own Conagra Brands Narrative

If you see the numbers differently or prefer to test your own assumptions, you can build a full Conagra view in just a few minutes, starting with Do it your way

A great starting point for your Conagra Brands research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

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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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