ConAgra price target lowered to $20.50 from $22 at TD Cowen

Investing.com - TD Cowen reduced its price target on ConAgra stock (NYSE:CAG) to $20.50 from $22.00 on Friday, while maintaining a Hold rating on the food manufacturer’s shares. The stock, currently trading at $21.41, has fallen significantly from its 52-week high of $33.24. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value metrics.

The research firm cited ConAgra’s vulnerability to several economic pressures, including potential tariff costs, Supplemental Nutrition Assistance Program (SNAP) cuts, and increasing financial strain on low-income consumers over the next 12 months. Despite these challenges, the company maintains a substantial 6.51% dividend yield and has maintained dividend payments for 50 consecutive years.

TD Cowen identified structural concerns for ConAgra, specifically pointing to the company’s lack of pricing power and ongoing supply chain disruptions that could impact performance.

The firm lowered its fiscal year 2026 earnings per share forecast to $1.91, below consensus estimates, after projecting 5.5% inflation for ConAgra in FY26, up from 4% in FY25, with tariff costs estimated at 1.5% of cost of goods sold, primarily affecting steel cans.

TD Cowen expects ConAgra’s EBITDA margin to decline by 190 basis points, significantly more than the 30 basis point decrease anticipated by other analysts, noting that sales growth is unlikely to return to 1% with retail sales down 2.8% over the last 12 weeks and 1.4% over the last 52 weeks. For deeper insights into ConAgra’s financial health and additional analyst perspectives, access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Conagra Brands has made significant moves in its business strategy by selling its Van de Kamp’s and Mrs. Paul’s frozen seafood brands to High Liner Foods for $55 million. This transaction, which is expected to close by the end of July 2025, is part of Conagra’s effort to focus on growth areas and is anticipated to slightly reduce fiscal year 2026 earnings per share. Additionally, Conagra has finalized the sale of its Chef Boyardee brand to Hometown Food Company, a move that aligns with its strategy to refine its product portfolio. Analysts have also weighed in on Conagra’s financial outlook. UBS has initiated coverage of Conagra with a neutral rating, citing a balanced risk-reward profile despite challenges in achieving organic growth. Meanwhile, Goldman Sachs downgraded Conagra from Neutral to Sell, expressing concerns over margin pressures and setting a new price target of $21. The company continues to navigate industry-wide challenges, including inflationary pressures and changing consumer preferences. Furthermore, Conagra announced that board member Fran Horowitz will step down at the 2025 Annual Meeting of Shareholders, a decision not related to any disagreements with the company.

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