Last Update 19 Mar 26

Fair value Decreased 1.54%

CAG: Future Cash Flow And Margin Discipline Will Drive Upside Potential

The updated analyst price target for Conagra Brands reflects a modest trim in fair value to about $18.75 from roughly $19.05, as analysts factor in slightly higher discount rates, a small pullback in profit margin assumptions, and a marginally lower future P/E multiple, even as some recent research has modestly adjusted estimates and price targets across the packaged food peer group.

Analyst Commentary

Recent research on Conagra Brands reflects a split view, with some firms trimming ratings and targets while others highlight reaffirmed guidance and modest estimate boosts relative to packaged food peers.

Bullish Takeaways

Bullish analysts point to Conagra's reaffirmed guidance and higher free cash flow conversion expectations compared with some peers that updated their outlooks more cautiously. This is incorporated into cash flow based valuation work that they view as supportive.
Modest upward adjustments to earnings estimates are cited by bullish analysts as a sign that execution on current plans is tracking in line with, or slightly ahead of, earlier expectations.
Price targets in the high teens to around $20 from supportive firms frame Conagra as reasonably valued in the packaged food group. The refreshed targets align with peers that maintained or fine tuned their ratings instead of cutting them.
The relative contrast between Conagra reaffirming guidance and certain peers reducing theirs is viewed by bullish analysts as a positive data point for Conagra's near term execution quality.

Bearish Takeaways

Bearish analysts highlight higher leverage and dividend payout ratios, which they view as constraints on financial flexibility and a source of risk if earnings come under pressure.
Concerns about earnings risk are central to the cautious stance, with expectations that profit headwinds could weigh on results and be a drag on valuation versus peers.
The combination of earnings risk, leverage and what bearish analysts describe as tight dividends is seen as a reason the shares could lag other packaged food names over time.
Lower price targets in the mid teens from these cautious views indicate a more conservative assessment of fair value, particularly if profit catalysts skew more negative than positive.

What's in the News

Target plans to require all cereals on its shelves to be made without certified synthetic colors by the end of May, which could influence product and ingredient decisions for brands supplied by companies such as Conagra (Axios).
Conagra is expanding its manufacturing facility in Fayetteville, Arkansas with an approximately US$220 million multi year investment, with construction planned to begin later this year and an expectation of more than 100 additional jobs over five years.
The Fayetteville expansion is aimed at significantly increasing chicken production capacity for ready to eat meals across brands such as Hungry Man, Banquet, Healthy Choice, Gardein, and Evol, with the facility currently producing about 15 million cases annually.
Conagra recently launched Banquet MEGA Breakfast Bowls, introducing four protein focused frozen breakfast options, each with 30 g of protein and using tray in tray steaming technology intended to keep ingredients and sauces separate until cooking.
The company reported US$968 million of non cash goodwill and brand impairment charges for the second quarter ended November 23, 2025, primarily linked to a sustained decline in share price and market capitalization, and issued organic net sales guidance for the second quarter of fiscal 2025 of a 1% decline to 1% growth versus fiscal 2025.

Valuation Changes

Fair value was trimmed slightly to about $18.75 from roughly $19.05.
The discount rate edged up modestly to 7.15% from about 7.05%.
Revenue growth was left effectively unchanged at about 44.21% compared with roughly 44.20%.
The net profit margin was reduced modestly to about 8.20% from roughly 8.27%.
The future P/E was adjusted slightly lower to about 11.88x from roughly 11.93x.

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Key Takeaways

Strong consumer demand and stabilized supply chains bolster future revenue growth and operational efficiencies, supporting earnings performance.
Effective cash flow management and productivity improvements enable debt reduction, margin expansion, and enhanced earnings per share (EPS) growth.
Challenging macroeconomic conditions, inflation, and supply chain issues present significant risks to Conagra's revenue, margins, and financial performance.

Catalysts

About Conagra Brands

Operates as a consumer packaged goods food company primarily in the United States.What are the underlying business or industry changes driving this perspective?

Strong consumer demand and steady consumption trends bode well for future revenue growth, suggesting that the company can maintain its top-line momentum even amidst a challenging economic backdrop.
The stabilization of supply chain constraints, particularly in the latter half of next year, is expected to improve operational efficiencies and margins, benefiting overall earnings performance.
The incremental 53rd week in fiscal '26 presents an opportunity for additional revenue that could positively impact year-over-year comparisons, positively affecting earnings.
Ongoing productivity improvements, equal to 4% of cost of goods sold, can offset inflationary pressures, supporting margin expansion and helping to boost net earnings.
Continued strong cash flow allows Conagra Brands to prioritize debt reduction, which could decrease interest expenses, thereby improving net income and contributing positively to earnings per share (EPS) growth.

Conagra Brands Earnings and Revenue Growth

Conagra Brands Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Conagra Brands's revenue will decrease by 0.5% annually over the next 3 years.
Analysts assume that profit margins will shrink from 9.9% today to 7.9% in 3 years time.
Analysts expect earnings to reach $905.9 million (and earnings per share of $2.07) by about August 2028, down from $1.2 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $1.0 billion in earnings, and the most bearish expecting $558 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 13.5x on those 2028 earnings, up from 7.8x today. This future PE is lower than the current PE for the US Food industry at 21.0x.
Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.81%, as per the Simply Wall St company report.

Conagra Brands Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The macroeconomic environment is extremely dynamic and challenging, affecting Conagra's ability to provide fiscal guidance, indicating potential risks to future revenue and earnings.
Continued inflation and tariffs, along with evolving consumer sentiment, present uncertainties for Conagra that could impact its net margins and earnings.
Supply chain constraints and their lingering higher costs, even as inventories are rebuilt, could negatively affect gross margins and profitability.
There is potential weakness in certain channels, like convenience stores, due to shifting consumer behaviors which could impact revenue in specific product segments.
Unanticipated regulatory or external changes, such as state bans on certain additives and ingredient tariffs, could add further complexity and cost pressures that impact overall financial performance.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $20.933 for Conagra Brands based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $26.0, and the most bearish reporting a price target of just $18.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $11.4 billion, earnings will come to $905.9 million, and it would be trading on a PE ratio of 13.5x, assuming you use a discount rate of 6.8%.
Given the current share price of $18.79, the analyst price target of $20.93 is 10.2% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Stable Supply Chains And Productivity Will Deliver Future Success