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Investing.com - ConAgra Brands (NYSE:CAG) stock, currently trading at $19.11 and near its 52-week low of $18.82, faced pressure after Bernstein lowered its price target to $21.00 from $25.00 while maintaining a Market Perform rating on the packaged food company. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value estimates.
The price target reduction follows ConAgra’s announcement that it would prioritize volume growth in fiscal year 2026, requiring significant reinvestment that has led to earnings guidance approximately 23% below consensus estimates and EBIT margins 265 basis points below expectations. Despite these challenges, the company maintains a substantial 7.18% dividend yield and trades at an attractive P/E ratio of 8.49.
Bernstein noted that while some challenges stem from external factors including tariffs, protein and labor inflation, stranded costs from recent divestments, supply chain issues in frozen chicken and vegetables, rebased incentive compensation, and adverse foreign exchange rates.
The analyst firm also pointed to shifting consumer demand curves that may require ConAgra to rebuild trust among lapsed consumers, particularly as media coverage around food additives increases and consumer awareness of heavily processed foods grows.
Bernstein acknowledged ConAgra’s positive efforts in renovating brands like Healthy Choice, upgrading Banquet, and shifting its portfolio toward high-protein and high-fiber snacks, but suggested these changes may not be sufficient given evolving consumer preferences. For deeper insights into ConAgra’s financial health and future prospects, investors can access comprehensive analysis and 12+ additional ProTips through InvestingPro’s detailed research reports.
In other recent news, ConAgra has faced a series of analyst downgrades following its latest earnings report and fiscal year 2026 outlook. Stifel lowered its price target to $21 from $26, citing an earnings miss in the fourth quarter due to lower sales and margins. ConAgra’s organic sales fell 3.5% for the quarter, and the company projected a decline in earnings per share for fiscal year 2026. UBS also reduced its price target to $20, expressing skepticism about ConAgra’s growth projections and noting a potential 40% decline in first-half 2026 earnings per share. Evercore ISI set a new price target of $24, highlighting the challenges posed by higher costs and investments in promotions. Wells Fargo (NYSE:WFC) adjusted its price target to $20, emphasizing concerns about ConAgra’s sales trajectory and margin pressures. Lastly, BofA Securities lowered its price target to $18, focusing on the weak fiscal 2026 outlook and noting significant cost inflation in protein prices. These developments indicate a cautious stance among analysts regarding ConAgra’s near-term financial performance.
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