On Friday, Wells Fargo adjusted its price target for shares of ConAgra Brands, Inc. (NYSE:CAG), increasing it to $32.00 from the previous $30.00. The firm has chosen to maintain an Equal Weight rating on the stock. The revision reflects a modest increase in the earnings per share (EPS) estimate for the calendar year 2025, which now stands at a multiple of 11.5 times, up from 11 times, compared to the historical average of around 13 times.
The analyst from Wells Fargo noted that the new price target is based on a slightly higher expected EPS for the upcoming year. The firm's forecast for the fiscal year 2024 EPS has been slightly raised to $2.62, up from $2.61, indicating a building flexibility in the figures. For fiscal year 2025, the EPS estimate has been adjusted to $2.69 from the earlier projection of $2.67.
The commentary from Wells Fargo suggested some uncertainty about whether ConAgra's stock might retract a bit of its recent movement due to some unexpected factors related to delivery versus scanner data. However, the analyst indicated a broader sentiment in the food industry, implying that even marginal improvements could be perceived positively, despite ongoing debates about the sector's medium-term prospects.
The updated financial estimates and price target from Wells Fargo come as the food industry faces various challenges and discussions about its future trajectory. The slight uptick in the EPS estimates for ConAgra suggests a cautious optimism, with the firm acknowledging potential flexibility in the company's financial performance.
ConAgra Brands, headquartered in Chicago, is a major player in the packaged foods sector, offering a variety of products under numerous brand names. The company's stock performance and financial health are closely watched by investors and analysts, especially in the context of the evolving consumer goods market.
InvestingPro Insights
As investors digest the latest price target adjustment from Wells Fargo for ConAgra Brands, Inc. (NYSE:CAG), it's worth considering additional insights from InvestingPro. The company's commitment to shareholder returns is evident, with a notable high shareholder yield and a commendable track record of maintaining dividend payments for 49 consecutive years. Moreover, ConAgra has raised its dividend for 4 consecutive years, reinforcing its reputation as a reliable income stock.
On the valuation front, ConAgra is trading at a P/E ratio of 14.61, which is attractive especially considering its P/E ratio for the last twelve months as of Q3 2024 stands at 9.31. This is indicative of a low price-to-earnings ratio relative to near-term earnings growth, making it an interesting proposition for value investors. Additionally, the company's PEG ratio during the same period is 0.8, suggesting that the stock could be undervalued based on its earnings growth potential.
Investors looking for further insights will find additional InvestingPro Tips, including a total of 7 tips for ConAgra Brands. For those interested in a deeper analysis, there's an opportunity to benefit from a special offer: use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. This could be a valuable resource for those looking to make informed investment decisions based on comprehensive data and expert analysis.
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