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Conagra Brands, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Simply Wall St
·4 mins read

Conagra Brands, Inc. (NYSE:CAG) just released its quarterly report and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$2.7b, some 2.7% above estimates, and statutory earnings per share (EPS) coming in at US$0.67, 21% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Conagra Brands after the latest results.

View our latest analysis for Conagra Brands

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After the latest results, the consensus from Conagra Brands' 14 analysts is for revenues of US$10.9b in 2021, which would reflect a noticeable 4.2% decline in sales compared to the last year of performance. Per-share earnings are expected to shoot up 21% to US$2.46. In the lead-up to this report, the analysts had been modelling revenues of US$10.8b and earnings per share (EPS) of US$2.32 in 2021. So the consensus seems to have become somewhat more optimistic on Conagra Brands' earnings potential following these results.

The consensus price target was unchanged at US$38.23, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Conagra Brands at US$44.00 per share, while the most bearish prices it at US$34.00. This is a very narrow spread of estimates, implying either that Conagra Brands is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Conagra Brands' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with the forecast 4.2% revenue decline a notable change from historical growth of 2.6% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.9% annually for the foreseeable future. It's pretty clear that Conagra Brands' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Conagra Brands' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Conagra Brands' revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$38.23, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Conagra Brands going out to 2025, and you can see them free on our platform here..

Before you take the next step you should know about the 3 warning signs for Conagra Brands that we have uncovered.

This article by Simply Wall St is general in nature. 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.