TLDR
- CAG hit a new 52-week low of $14.62 on Monday, down ~5.4% on the day
- Long-time CEO Sean Connolly is stepping down May 31; John Brase takes over June 1
- Q3 EPS came in at $0.39, missing the $0.40 consensus estimate
- Multiple analysts cut price targets; consensus rating sits at “Reduce” with a $16.07 average target
- Dividend yield sits at ~9.8% but payout ratio is deeply negative, raising sustainability questions
Conagra Brands has had a rough stretch, and Monday made it worse. The stock dropped around 5.4%, touching a new 52-week low of $14.62 during trading. Volume was elevated, with nearly 2 million shares changing hands.
The sell-off was triggered by a leadership announcement. Long-serving CEO Sean Connolly will leave the company on May 31, ending a decade at the top. The board named John Brase as his replacement, effective June 1.
Brase comes with a solid résumé. He previously served as COO at J.M. Smucker and held senior roles at Procter & Gamble. Conagra said he will also join the company’s board of directors.
Analyst Reaction Was Cool
BofA Securities kept its Underperform rating and $15 price target on CAG following the news. The firm called the timing of the announcement a surprise and flagged several headwinds the incoming CEO will need to tackle.
At the top of that list: inflation pressures that dented EPS in fiscal 2026 and could weigh on fiscal 2027 growth. BofA also pointed to the dividend payout ratio, which sits above 80% — well above the company’s own target range of 50–55%.
Net debt to EBITDA stands at 3.8x. BofA suggested potential asset sales to reduce leverage, naming Hebrew National and Odom’s Tennessee Pride as brands that have come up in past discussions.
Deutsche Bank cut its price target to $14 with a Hold rating. JPMorgan and Stifel both trimmed their targets to $17. UBS lowered its target to $16 from $20, citing margin pressure and concerns heading into fiscal 2027.
The current analyst consensus sits at “Reduce” — 1 Buy, 12 Hold, 4 Sell — with an average price target of $16.07.
Earnings Miss Added Pressure
Conagra reported Q3 results on April 1. EPS came in at $0.39, one cent below the $0.40 analyst estimate. Revenue of $2.79 billion beat estimates of $2.76 billion, but quarterly revenue was still down 1.9% year-over-year.
In the same quarter a year ago, the company posted $0.51 EPS — a notable step down. Net margin is currently negative at -0.39%, and the P/E ratio sits at -142.54.
Organic sales grew 2.4% in the quarter, driven by a 0.5% volume increase and a 1.9% contribution from price and mix. Margins, however, came in weaker than expected, and a lower equity contribution from Ardent Mills hurt the bottom line.
The company narrowed its fiscal 2026 guidance following the results. Analysts currently forecast full-year EPS of $2.35.
CAG’s 50-day moving average is $17.52 and its 200-day moving average is $17.60 — the stock is trading well below both. The stock is down around 37% over the past year and off about 10.6% year-to-date.
The quarterly dividend of $0.35 per share is due June 3, with an April 30 record date. At current prices, that translates to an annualized yield of roughly 9.8%.
🚨 Our April Stock Picks Are Live!
A new month means new opportunities. Our analysts have just released their top stock picks for April, highlighting companies with strong momentum that rank highly on our KO Score algorithm. We’re also now sharing trade ideas for both long-term and short-term investors, giving you more ways to spot potential opportunities in the market.
Sign up to Knockout Stocks today and get 50% off to unlock the full list and see which stocks made the cut.
Use coupon code Special50 for your exclusive discount!
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
