CAG - Embedded Expectations Analysis - 2020 08 04
Conagra Brands, Inc. (CAG:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 22.3x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management appears concerned about the sustainability of recent growth trends, particularly internationally, and about their marginsSpecifically, management may lack confidence in their ability to sustain recent growth in their staples business, and they may be concerned about the sustainability of recent same customer sales. Moreover, they may be concerned about foreign exchange headwinds and international growth, and may be exaggerating the current momentum they are seeing in the market. They may also be concerned about their ability to reach synergy targets and sustain their operating margin, and about the sustainability of increased demand for frozen foods from millennials and generation Z
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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