JPMorgan assumes coverage of ConAgra stock with Neutral rating

Investing.com - JPMorgan has assumed coverage of ConAgra Brands (NYSE:CAG) with a Neutral rating and a price target of $20.00, down from the previous target of $25.00. The stock, currently trading near its 52-week low at a P/E ratio of 8x, appears undervalued according to InvestingPro’s Fair Value analysis.

The firm cited ongoing cost headwinds, particularly in protein and tariff-related expenses, as well as volume challenges facing the packaged food company.

JPMorgan also expressed concern about ConAgra’s dividend, which it estimates could absorb approximately 90% of the company’s free cash flow in fiscal year 2026.

Despite these challenges, JPMorgan noted that ConAgra could become a "disproportionate winner" if industry conditions shift favorably for the packaged food sector.

The firm pointed to ConAgra’s below-average margins, heightened exposure to protein costs, depressed valuation, and larger debt load as factors that could lead to greater margin volatility but also potentially benefit the company’s equity value in an industry-wide positive re-rating.

In other recent news, Conagra Brands Inc. provided insights into its Q4 2025 performance and fiscal 2026 outlook during a recent earnings call. The company anticipates a challenging year ahead, primarily due to margin compressions and core inflation pressures. Despite these hurdles, Conagra is focusing on innovation and strategic investments to strengthen its market position. The company has not announced any mergers or acquisitions at this time. Analysts have not reported any upgrades or downgrades for Conagra Brands recently. Conagra’s strategic initiatives aim to address the current economic challenges and maintain its competitive edge in the industry. These developments are part of the company’s ongoing efforts to navigate the evolving market landscape.

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