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Factors Shaping Conagra's (CAG) Fate Ahead of Q4 Earnings

Zacks Equity Research
·3 mins read

Conagra Brands, Inc. CAG is slated to release fourth-quarter fiscal 2020 results on Jun 30. This renowned food company delivered a negative earnings surprise of 4.1% in the last reported quarter, though it outperformed the consensus mark in the preceding two quarters.

The Zacks Consensus Estimate for earnings in the fourth quarter has gone up a penny to 66 cents per share over the past 30 days. Further, this suggests a considerable rise of 88.3% from the figure reported in the year-ago period. The consensus mark for revenues stands at $3,185 million, indicating growth of 21.3% from the year-ago period’s reported figure.

Conagra Brands Inc. Price, Consensus and EPS Surprise

Conagra Brands Inc. Price, Consensus and EPS Surprise
Conagra Brands Inc. Price, Consensus and EPS Surprise

Conagra Brands Inc. price-consensus-eps-surprise-chart | Conagra Brands Inc. Quote

Key Factors to Note

In its third-quarter earnings release, management stated that its fourth-quarter performance (till Mar 31) gained from solid shipments and consumption in the domestic retail business, stemming from the growing spread of COVID-19. This helped the company counter softness in the foodservice business. Management raised its fiscal 2020 sales and profit targets, given an undisturbed supply-chain network. These factors paint an encouraging picture for the quarter under review.

Apart from this, Conagra has been benefiting from its portfolio refinement efforts, which include prudent buyouts and meaningful divestitures. To this end, it has been gaining from Pinnacle Foods’ buyout (concluded in 2018). These upsides along with a focus on innovation bode well. However, escalated input costs have been a threat to Conagra for a while.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Conagra this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Conagra currently has a Zacks Rank #3 and an Earnings ESP of +2.24%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks With Favorable Combinations

Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat.

Helen of Troy HELE has an Earnings ESP of +11.48% and a Zacks Rank #1.

Kimberly-Clark KMB has an Earnings ESP of +1.78% and a Zacks Rank #2.

General Mills GIS has an Earnings ESP of +2.10% and a Zacks Rank #3.

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KimberlyClark Corporation (KMB) : Free Stock Analysis Report
 
Conagra Brands Inc. (CAG) : Free Stock Analysis Report
 
General Mills, Inc. (GIS) : Free Stock Analysis Report
 
Helen of Troy Limited (HELE) : Free Stock Analysis Report
 
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Zacks Investment Research