Packaged foods company Conagra Brands (CAG) will report its first-quarter results for fiscal 2027 on Sept. 30 before the market opens. Ahead of that, investors are not particularly keen on the stock, which has been weighed down by food inflation that is compressing margins. The company has also cut its dividend rate, which indicates cash-preservation efforts.
Grocery inflation is not expected to mitigate anytime soon. This year’s sustained rise in oil prices, fueled by the Iran war, is straining the grocery sector enough that retail prices are unlikely to stay contained as the year advances. Therefore, Conagra’s Q1 results will be under scrutiny to see how it mitigates macro pressures. Let's take a look into the company before those numbers drop.
About Conagra Brands Stock
Conagra Brands is a leading North American branded packaged-foods company with a market capitalization of $6.85 billion. Headquartered in Chicago, Illinois, the company develops, manufactures, and markets a wide portfolio of frozen, refrigerated, shelf-stable, and snack products sold primarily through U.S. retail grocery channels, with additional foodservice and international operations.
Its segments include Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice, supporting iconic brands such as Birds Eye, Healthy Choice, Marie Callender’s, Slim Jim, Duncan Hines, and Reddi-wip. Conagra’s supply chain spans dozens of domestic manufacturing and distribution sites, optimized for ambient, refrigerated, and frozen products across the continent.
Conagra’s stock has fallen 22% over the past 52 weeks, mainly because investors are pricing in weaker growth, margin pressure, and a halved dividend. Over the past six months, it has been down 10%. It reached a 52-week low of $12.53 on June 4 but is up 13% from that level.
On a forward-adjusted basis, Conagra’s price-to-earnings (non-GAAP) ratio of 9.93x is lower than the industry average of 14.48x.
Q4 Sales Increased but Cut Dividend and Issued Soft Outlook
For the fourth quarter of fiscal 2026 (quarter ended May 31), Conagra’s net sales increased by 3.6% year-over-year (YoY) to $2.88 billion. However, the company also reported one extra week compared with the prior-year period (14 weeks vs. 13 weeks). Organic net sales were flat YoY. A $1.61 billion goodwill impairment charge drove an operating loss of $1.66 billion; on an adjusted basis, Conagra posted an operating profit of $336.50 million, but it fell 12.5% YoY. Adjusted EPS declined by 16.1% YoY to $0.47.
At fiscal year-end, Conagra’s net debt stood at $7.10 billion, down 11.9% from a year earlier, bringing its net leverage ratio to 3.83x. Free cash flow was $979 million, down from $1.30 billion the prior year. Despite the cash level, Conagra cut its dividend to an annualized rate of $0.70 per share (halving it from $1.40 per share), a move tied directly to its deleveraging efforts. This equates to a quarterly dividend rate of $0.175 per share, with the next installment set to be paid to shareholders on Dec. 3.
For fiscal 2027, Conagra expects organic net sales to drop between 1% and 3% compared to fiscal 2026. It also expects an adjusted operating margin of 10%-10.5%. Wall Street analysts also have tepid expectations regarding Conagra’s bottom-line trajectory. The company’s fiscal 2027 EPS is expected to decline by 15.7% YoY to $1.45, followed by an 8.3% improvement to $1.57 in fiscal 2028. For the about-to-be-reported first quarter of fiscal 2027, EPS is projected to fall by 20.5% to $0.31.
What Do Analysts Think About CAG Stock?
Wall Street analysts are keeping a neutral stance on CAG stock. This month, Deutsche Bank analysts maintained a “Hold” rating on the stock and raised the price target from $12 to $13. As the company faces a challenging market landscape, the firm is maintaining its neutral opinion. However, the slight increase in the price target suggests modest optimism about Conagra.
Analysts at Evercore ISI, on the other hand, lowered the price target on Conagra’s stock from $13.50 to $12.50 while maintaining an “In-Line” rating, which sits below the consensus rating.
Wall Street analysts are taking a cautious stance on CAG stock. Of the 16 analysts rating CAG, the consensus rating is “Hold.” That’s based on one “Strong Buy,” 10 “Holds,” one “Moderate Sell,” and four “Strong Sells.” The average price target of $13.77 implies a 2.3% potential downside from current levels. However, the Street-high price target of $17 reflects a 21% upside.
On the date of publication, Anushka Dutta 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.