Conagra Brands (CAG): Assessing Valuation After Slim Jim-Buffalo Wild Wings Chicken Stick Launch

Conagra Brands (CAG) just rolled out a collaboration that could turn heads for anyone watching the food and snacks space. The company’s Slim Jim brand is teaming up with Buffalo Wild Wings to launch two new chicken stick flavors, an effort clearly aimed at capitalizing on both the surging demand for meat snacks and the loyal fanbase of these household names. This launch is not only about creative product development; it also signals Conagra’s intent to compete more aggressively in the competitive snacking aisle, where innovation can quickly separate leaders from laggards. Looking at Conagra’s recent track record, the news comes at an interesting time for the stock. After a largely subdued year, shares have slipped more than 37% over the past twelve months, and momentum has generally lagged the market. Despite short-lived gains in recent weeks, longer-term performance remains under pressure as investors sift through revenue and income trends that have plateaued or declined. With this new product line hitting the shelves, there is a fresh storyline, but it arrives against a challenging backdrop. So, should investors treat this as a turning point for a discounted stock, or is the market already factoring in all the potential upside from these kinds of moves?

Most Popular Narrative: 7% Undervalued

According to the most widely followed narrative, Conagra Brands appears undervalued by 7% based on consensus analyst estimates of future earnings, revenue, and risk factors. This perspective reflects cautious optimism, even as fundamental headwinds persist for the company.

Strong consumer demand and steady consumption trends bode well for future revenue growth. This suggests 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. This would benefit overall earnings performance.

Want to know exactly how this narrative sees Conagra staging a comeback? The calculation hinges on controversial future profit projections and some aggressive underlying assumptions that set it apart from the market's expectations. Are analysts betting on a hidden turnaround story or discounting painful challenges ahead? The real fuel behind this valuation might surprise you.

Result: Fair Value of $20.93 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained inflation or unexpected regulatory changes could undermine analyst optimism and lead to further downside for Conagra’s earnings outlook.

Find out about the key risks to this Conagra Brands narrative.

Another View: The SWS DCF Model Perspective

A contrasting look with our SWS DCF model also indicates Conagra may be undervalued, but it relies on different long-term forecasts and assumptions. Which approach will best capture reality as market sentiment shifts?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Conagra Brands for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Conagra Brands Narrative

If you have a different perspective or want to dig deeper into Conagra’s story, you can put together your own view in just a few minutes. Do it your way

A great starting point for your Conagra Brands research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.

Looking for More Investing Opportunities?

Move beyond the familiar stocks and put your capital to work in dynamic markets. If you want to seize more potential, don’t miss these exciting directions:

• Boost your search for market bargains by tapping into undervalued stocks based on cash flows. These could be trading below their true worth and may be ready for your next smart move.
• Tap into future healthcare breakthroughs with healthcare AI stocks. Uncover businesses driving the next generation of medical technology and innovation.
• Capture steady income in your portfolio with dividend stocks with yields > 3%. Find stocks offering yields over 3% to help secure your financial goals.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com