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Investing.com - ConAgra (NYSE:CAG) received a reiterated Hold rating and $26.00 price target from Stifel following its fourth-quarter earnings report that fell short of expectations. The stock, currently trading at $19.41, is near its 52-week low and appears undervalued according to InvestingPro analysis.
The food company reported fourth-quarter 2025 earnings per share of $0.56, representing an 8% decline year-over-year. This result missed Stifel’s estimate by $0.05 and fell $0.02 below consensus expectations.
ConAgra’s organic sales declined 3.5% in the quarter, consisting of a 2.5% volume decline and a 1.0% decrease from lower price/mix. Gross margin contracted 184 basis points from the prior year, pressured by input cost inflation and supply chain disruptions.
Operating profit declined 10.5% with the operating margin contracting 96 basis points to 13.8% compared to the same period last year.
For fiscal year 2026, ConAgra issued initial guidance projecting organic sales between -1% and +1%, an operating profit margin range of 11% to 11.5% (down 285 basis points at mid-point), and earnings per share between $1.70 and $1.85, representing a 20% to 26% year-over-year decline.
In other recent news, Conagra Brands has entered into a new $2 billion revolving credit agreement with Bank of America and other lenders. This agreement provides the company with financial flexibility, maturing in 2030, with options for extension. Conagra also completed the sale of its Van de Kamp’s and Mrs. Paul’s frozen seafood brands to High Liner Foods, further adjusting its brand portfolio. The financial terms of this transaction were not disclosed. In addition, Conagra announced plans to remove artificial colors from its U.S. frozen products by the end of 2025, aligning with its broader strategy to modernize its portfolio to meet consumer preferences.
Analysts have recently revised their outlook on Conagra. Evercore ISI lowered its price target for the company to $26, citing cost headwinds and limited pricing power. They also reduced their fiscal year 2026 earnings per share estimate to $2.16. Similarly, TD Cowen decreased its price target to $20.50, highlighting economic pressures and structural concerns such as supply chain disruptions. They forecast a fiscal year 2026 earnings per share of $1.91, below consensus estimates. These developments reflect ongoing challenges and strategic adjustments for Conagra Brands.
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