Conagra Brands (NYSE:CAG) shares are under pressure today after the consumer-packaged food products provider reported mixed fourth-quarter numbers and issued a lackluster financial outlook.
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Conagra Brand’s Mixed Q2 Performance
During the quarter, CAG’s revenue declined by 2.3% year-over-year to $2.91 billion, missing expectations by $20 million. Its EPS of $0.61, on the other hand, exceeded estimates by $0.04. The company’s organic net sales for the quarter dropped by 2.4%. Despite this performance, Sean Connolly, the President and CEO of Conagra, sounded optimistic. Connolly expects a gradual improvement in the current challenging industry conditions as consumers adapt to new reference prices.
Thanks to CAG’s focus on efficiency, its gross profit margin improved by 135 basis points to 27.7% for the quarter. Importantly, the company’s net cash flows for the full year came in at a healthy $2 billion. Additionally, its net debt decreased by 8.5% to $8.4 billion.
CAG’s Outlook Disappoints
Still, a lackluster outlook for Fiscal year 2025 is weighing on the stock today. Conagra estimates organic net sales growth to be flat to -1.5% for the year. EPS for the year is anticipated to be in the range of $2.60 to $2.65. Separately, Conagra has declared a quarterly dividend of $0.35 per share. The CAG dividend is payable on August 29 to investors of record on August 1.
Is CAG Stock a Buy, Sell, or Hold?
Today’s price decline further adds to the nearly 9% drop in Conagra shares over the past year. Overall, the Street has a Hold consensus rating on Conagra Brands, alongside an average CAG price target of $31.29. However, analysts’ views on the stock could see a revision following today’s earnings report.
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