CAG - Embedded Expectations Analysis - 2020 05 12
Conagra Brands, Inc. (CAG:USA) currently trades above corporate average relative to UAFRS-based (Uniform) earnings, with a 26.3x Uniform P/E. At these levels, markets have bullish expectations for the firm, but management appears concerned about the sustainability of their business performance, COVID-19, and long-term investmentsSpecifically, management may lack confidence in their ability to continue delivering food supply to consumers and sustain strong staples businesses performance, and they may have concerns about the impact of the COVID-19 pandemic and their Gardein's manufacturing capacity expansion investments. Furthermore, they may be overstating the strength of their brand-building and innovation processes and the potential of their innovation pipeline. Moreover, they may be concerned about Food Service segment sales declines, their long-term business investments, and the value of potential divestitures. Additionally, they may be concerned about economic uncertainty and the progress of their Legacy Pinnacle plants' conversion to SAP, and they may lack confidence in their ability to sustain Hunt's tomatoes and Chef Boyardee growth
Conagra Brands is a packaged goods food company. The company's segments are: Grocery and Snacks, which includes branded, shelf stable food products sold in various retail channels; Refrigerated and Frozen, which includes branded, temperature controlled food products sold in various retail channels; International, which includes branded food products sold in retail and foodservice channels outside of the U.S.; Foodservice, which includes customized food products for sale to restaurants and other foodservice establishments; Pinnacle Foods, which includes and private-label food products; and Commercial Foods, which included commercially branded and private label food and ingredients, among others.
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