What to Expect When Conagra Reports Thursday Morning

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Conagra Brands Inc. (NYSE: CAG) is set to release its fiscal first-quarter earnings report before the markets open on Thursday. The consensus estimates are calling for $0.39 in earnings per share (EPS) and $2.48 billion in revenue. In the same period of last year, the packaged foods giant said it had $0.47 in EPS and $1.83 billion in revenue.

Earlier this month, Conagra announced that it will sell its Direct Store Delivery (DSD) snacks business to Utz Quality Foods. The sale includes the Tim’s Cascade Snacks, Hawaiian Snacks, Erin’s, Snyder of Berlin and Husman’s brands.

Conagra Brands acquired the DSD snacks business in October 2018 as part of its acquisition of Pinnacle Foods. The sale is subject to customary closing conditions and is expected to be completed before the end of the calendar year. Note that the financial terms were not disclosed.

Sean Connolly, president and CEO of Conagra Brands, commented:

We continue to reshape our portfolio and focus our resources on priorities that support Conagra’s business strategy and create value for shareholders. While Conagra has a large and growing snacks business, we do not currently operate with a DSD model. We believe this business will have more opportunity for growth under Utz, an established DSD operator.

Excluding Wednesday’s move, Conagra had outperformed the broad markets, with its stock up about 38% year to date. However, in the past 52 weeks the stock was actually down 21%.

A few analysts weighed in on Conagra ahead of the results:

  • Credit Suisse has a Hold rating with a $29 price target.
  • Goldman Sachs has a Neutral rating and a $31 price target.
  • UBS rates it as Buy with a $32 target price.
  • Merrill Lynch’s Buy rating comes with a $35 price target.
  • Citigroup has a Buy rating and a $34 price target.

Shares of Conagra traded up over 1% on Wednesday to $29.98, in a 52-week range of $20.22 to $37.60. The consensus price target is $32.08.


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