ConAgra stock price target lowered to $26 at Evercore ISI on cost headwinds

Investing.com - Evercore ISI has reduced its price target on ConAgra (NYSE:CAG) to $26.00 from $31.00 while maintaining an "In Line" rating on the stock. The company currently trades near its 52-week low of $20.25, having declined over 22% year-to-date.

The firm cited anticipated fiscal year 2026 cost headwinds, including tariffs and commodity inflation, combined with limited pricing power that will likely create another challenging profit year for the food company.

Evercore ISI lowered its FY26 earnings per share estimate by 11% to $2.16, representing a 6% year-over-year decline, compared to the consensus estimate of $2.24.

The new $26 price target represents 12 times Evercore’s calendar year 2027 EPS estimate, reflecting a discount to the mid-point P/E of 13x, based on the five-year two-standard deviation forward range of 10-16x.

Evercore noted that while it continues to see growth potential in ConAgra’s Frozen and Snack segments, which represent approximately 65% of retail sales, it will wait for innovation and marketing to strengthen volume trends and pricing power before becoming more positive on the stock. Despite challenges, the company maintains a notable 6.67% dividend yield and has sustained dividend payments for 50 consecutive years. For deeper insights into ConAgra’s valuation and 12 additional ProTips, visit InvestingPro.

In other recent news, Conagra Brands reported fiscal 2024 net sales exceeding $12 billion. The company announced a new $2 billion revolving credit agreement with Bank of America, replacing its previous facility. This agreement, which matures in 2030, provides Conagra with flexible borrowing options based on its debt ratings. Additionally, Conagra completed the sale of its Van de Kamp’s and Mrs. Paul’s frozen seafood brands to High Liner Foods, although the financial terms were not disclosed. The company plans to remove artificial colors from its frozen products by the end of 2025 as part of its modernization strategy. TD Cowen recently lowered its price target for Conagra to $20.50, citing economic pressures and structural concerns like supply chain disruptions. The firm also adjusted its fiscal year 2026 earnings per share forecast to $1.91, below consensus estimates. Lastly, board member Fran Horowitz will step down at the 2025 Annual Meeting of Shareholders, a decision not related to any disagreement with the company.

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