Shares of consumer packaged food products provider, Conagra Brands (NYSE:CAG), are on the rise today after its third-quarter numbers fared better than estimates.
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During the quarter, revenue declined by 1.7% year-over-year to $3.03 billion. Still, the figure outpaced expectations by $20 million. Moreover, EPS of $0.69 exceeded estimates by $0.04.
Improving Picture for CAG
Sean Connolly, the President and CEO of Conagra, noted that the company is experiencing improving volume trends in its domestic retail business. Additionally, a focus on cost optimization is helping the company drive a recovery in margins.
Despite the contraction in revenue, Conagra’s gross profit improved by 2.4% to $859 million on the back of productivity gains. However, higher selling, general, and administrative expenses weighed on the company’s net income.
Congara Brand’s Mixed Outlook
Notably, Conagra expects its adjusted operating margin at a healthy 15.8% for Fiscal Year 2024. The company continues to estimate a decrease of 1% to 2% in organic net sales for the year. Adjusted EPS for the year is anticipated to hover between $2.60 and $2.65.
Is CAG a Buy, Sell, or a Hold?
Today’s price gains further add to the nearly 12.3% rise in Conagra shares over the past six months. Overall, the Street has a Hold consensus rating on Conagra Brands, alongside an average CAG price target of $29.67. However, analysts’ views on the stock could see a revision following today’s earnings report.
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