Does Conagra’s Recent Slump Signal a Discounted Opportunity for 2025?

If you have ever found yourself staring at Conagra Brands’ stock chart and debating your next move, you are not alone. The consumer staples giant, trading under the ticker symbol CAG, has certainly given investors a lot to think about lately. After a choppy year, the stock recently closed at $19.30, down just under 1% over the last month and more than 30% year-to-date. Longer-term performance tells a similar story, with the one-year total return sitting at -33% and five-year total return near -38%.

What is behind this slide? Some of the price action can be attributed to industry-wide headwinds. Investors have focused on food companies recently, weighing concerns about sluggish sales growth and inflation’s effect on consumer demand. At the same time, analyst price targets still offer a glimmer of upside, with Conagra currently trading at nearly 10% below where analysts see fair value. Intrinsic value models suggest an even steeper discount. Right now, the intrinsic value estimate is more than 60% above the current share price.

When looking at value metrics, Conagra actually stands out. The company is considered undervalued in five out of six key checks, giving it a solid valuation score of 5. However, not all undervaluation signals are created equal. Next, we will break down exactly how those valuation checks work and examine the strengths and surprises in Conagra’s numbers. Stay tuned, as we will also explore one less-common way to look at value that could change how you see the stock.

Conagra Brands delivered -32.9% returns over the last year. See how this stacks up to the rest of the Food industry.

Approach 1: Conagra Brands Cash Flows

A Discounted Cash Flow (DCF) model estimates the value of a company by projecting its future cash flows and then discounting them back to today's value. This helps investors determine whether a stock is trading above or below its fair value.

For Conagra Brands, the latest twelve months’ Free Cash Flow was $1.32 billion. Analysts and estimates project that annual cash flow will remain strong over the next decade, with a forecast of $1.11 billion in Free Cash Flow by 2035. These projections are based on a combination of analyst expectations and modest growth assumptions, so the model reflects a realistic outlook rather than overly optimistic guesses.

After running the numbers through a detailed two-stage Free Cash Flow to Equity model, the resulting intrinsic value estimate for Conagra Brands is $48.29 per share. When compared with the recent market price of around $19.30, this suggests the stock is trading at a 60% discount to its estimated fair value.

This analysis indicates that Conagra Brands appears undervalued based on cash flow, which may be of interest to investors looking for value opportunities in the food sector.

Result: UNDERVALUED

Our DCF analysis suggests Conagra Brands is undervalued by 60.0%. Track this in your watchlist or portfolio, or discover more undervalued stocks based on DCF analysis.

Approach 2: Conagra Brands Price vs Earnings

For profitable companies like Conagra Brands, the Price-to-Earnings (PE) ratio is a go-to yardstick for valuation. This popular metric reveals how much investors are willing to pay for each dollar of the company’s earnings. A lower PE can signal value, but it is important to remember that fair multiples depend on growth prospects, market confidence, and sector risk. Fast-growing or lower-risk firms typically sustain higher PEs, while riskier or slower-growth companies trade at lower multiples.

Conagra’s current PE ratio sits at 8.02x. This stands out when stacked against its food industry peers, who average around 16x, and is even more striking next to the broader industry average of 21.27x. The market is pricing Conagra significantly below both its competitors and its sector, despite its consistent profitability.

To dig a little deeper, we can turn to the Fair Ratio, a proprietary benchmark that weighs factors like Conagra’s earnings growth, margins, scale, and risk profile. For Conagra, the Fair PE Ratio is estimated at 13.5x. Since the company’s actual PE of 8.0x is well below this figure, it suggests the stock is undervalued on this basis, especially for investors willing to take a longer-term view.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Conagra Brands Narrative

Beyond ratios and forecasts, Narratives offer a more dynamic approach to investing by letting you define the story behind a company’s numbers. This approach represents your unique perspective on its future, tying together fair value and estimates for revenue, earnings, and margins in one coherent view.

A Narrative connects what you believe about Conagra Brands’ business, such as how well its brands might weather industry challenges or benefit from supply chain improvements, to a clear set of future financial outcomes and a resulting fair value.

On Simply Wall St, Narratives are easy to create and refine, supported by a community of millions sharing their views. You do not need to be a financial expert to take part; you can quickly see how your view compares to the market.

The real power of Narratives is how they help you decide when to buy, sell, or hold. You can compare your calculated Fair Value to today's Price, and keep that calculation up to date whenever news or company data changes.

For example, some investors believe Conagra’s efficiency and strong demand will drive a fair value as high as $26.00 per share, while others are cautious and see it closer to $18.00. This makes it easy to visualize how optimistic or conservative assumptions translate into actionable decisions.

Do you think there's more to the story for Conagra Brands? Create your own Narrative to let the Community know!

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.

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