Yahoo Finance Conagra Brands Misses on Q2 Earnings on Higher Inflation
Chicago, Illinois-based packaged foods company Conagra Brands reported lower-than-expected earnings in the fiscal second quarter and cautioned that high raw material and shipping costs are expected to hit full-year margins.
The world’s leading food company reported quarterly adjusted earnings of $0.64 per share for the quarter ended in November, missing the Wall Street consensus estimates of $0.68 per share.
However, the company’s revenue beat analysts’ expectations, rising more than 2% to $3.06 billion from a year ago. The company posted a quarterly net income of $275.5 million.
The company lowered its outlook for annual operating margin from 16% to around 15.5%. Organic net sales are now expected to rise about 3% annually, as opposed to 1%.
At the time of writing, Conagra Brands shares traded 2.65% higher at $34.42 on Friday. The stock slumped nearly 6% in 2021.
Executive Comments
“Looking ahead, we expect to continue experiencing cost pressures above original expectations in the second half of fiscal 2022. However, we believe the sustained elevated consumer demand coupled with the mitigating actions we have successfully executed and will continue executing, put us on track to overcome these near-term challenges, improve margins in the back half of the fiscal year, and deliver on our profit plan,” noted Sean Connolly, president and chief executive officer of Conagra Brands.
Analyst Comments
“We rate Conagra Brands (CAG) Equal-weight. Valuation of 10.5x CY23 EBITDA reflects current challenges, but we are cautious on demand risk post-COVID, as well as GM pressure given rising commodities, and limited pricing power,” noted Pamela Kaufman, equity analyst at Morgan Stanley.
“Advantaged legacy CAG topline growth outlook: Exposure to frozen, opportunity to turnaround refrigerated business, and snacking growth should sustain LSD org sales growth. PF deal increases operational complexity and reduces fundamental visibility: Greater risk of PF disappointing given higher expectations from management’s strong turnaround track record. Solid topline growth potential but limited mid-term target upside: Opportunity to close gross margin gap vs peers, but see downside risk given the inflationary environment and if synergy estimates fall short of F22 targets.”
Conagra Brands Stock Price Forecast
Five analysts who offered stock ratings for Conagra Brands in the last three months forecast the average price in 12 months of $38.20 with a high forecast of $40.00 and a low forecast of $35.00.
The average price target represents a 13.93% change from the last price of $33.53. From those five analysts, two rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.
Morgan Stanley gave the base target price of $36 with a high of $45 under a bull scenario and $19 under the worst-case scenario. The firm gave an “Equal-weight” rating on the packaged foods company’s stock.
Several other analysts have also updated their stock outlook. Deutsche Bank cut the target price to $35 from $36. Jefferies lifted the price objective to $40 from $38.
Technical analysis also suggests it is good to hold for now as 100-day Moving Average and 50-200-day MACD Oscillator is showing a mixed signal.
Check out FX Empire’s earnings calendar
This article was originally posted on FX Empire
More From FXEMPIRE:
Natural Gas Price Prediction – Prices Rise Climbing 5% for the Week
Gold Price Prediction – Prices Form Doji Day Following Payrolls
S&P 500 Weekly Price Forecast – Stock Markets Have Tough Week as Fed Changes
Natural Gas Weekly Price Forecast – Natural Gas Markets Rally for the Week
Crude Oil Weekly Price Forecast – Crude Oil Markets Have Rallied Significantly Again This Week
