Ahead of Conagra Earnings, Here's What Barchart Data Says Comes Next for CAG Stock

The derivatives market believes Conagra Brands (CAG) shares will inch higher after the company reports earnings on Sept. 30 before the market opens. Heading into the quarterly print, CAG is trading decisively below its key moving averages (MAs), with an RSI in the early 30s indicating intense selling pressure. 

Versus its year-to-date high, Conagra stock is currently down nearly 30%.

Where Options Data Suggests Conagra Stock Is Headed

The bullish options market sentiment is particularly significant given Conagra Brand is expected to record a decline in its fiscal Q1 earnings. 

Consensus is for the company to post $0.31 a share of earnings (EPS) for its first financial quarter, which would present a 20.51% decline on a year-over-year basis. 

Still, the put-to-call ratio on contracts expiring Oct. 2 sits at 0.79x currently, indicating a bullish skew (a reading below 1.00x is typically interpreted as constructive. According to Barchart, the upper price on those options contracts stands at $14.83 as of writing, signaling potential for a 4.49% rally in CAG shares through the end of next week. 

What Else Makes CAG Shares Attractive?

Insider trades offer another strong enough reason to load up on Conagra shares ahead of the firm’s upcoming quarterly release. 

Executives have increased their exposure to the food stock in the trailing 12 months (eight buy transactions against just one sell), reinforcing that management views the stock as undervalued and poised for significant gains ahead. 

Investors should also note that CAG currently pays a rather lucrative 4.93% dividend yield, which makes it significantly more attractive for income-focused investors. 

At the time of writing, Conagra Brands is trading at a forward price-to-earnings (P/E) multiple of about 10x, which makes it significantly cheaper to own than rival Kraft Heinz (KHC). 

How Wall Street Recommends Playing Conagra

Wall Street analysts do not, however, share options traders’ optimism for CAG stock ahead of the company’s Q1 earnings. 

According to Barchart, the consensus rating on Conagra Brands sits at “Hold” only, with the mean price target of about $13.77 indicating a potential downside of 2.5% from here. 

On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.