Conagra Brands (CAG) Stock Forecast & Price Target

Conagra Brands's outlook appears positive due to several key financial indicators, including an increase in advertising and promotional spending expected to reach approximately 2.5% of sales, which should enhance brand visibility and support revenue growth. Additionally, the company's portfolio is showing strong market share improvements, with 44% of products either holding or gaining market share, a significant increase from 39% in the previous quarter, indicating effective responses to past supply chain challenges. Moreover, the recovery in single-serve frozen meals, which now holds a 52.9% market share, along with a projected return to sales growth in the latter half of the year, further underscores the company's potential for continued financial strength.

Conagra Brands is facing profitability challenges in the coming quarters, primarily due to higher inflation and the depletion of pre-tariff inventory, which is resulting in Q2 operating margins falling below the anticipated range of 11-11.5%. Recent estimates have seen a downward adjustment in earnings per share (EPS) projections, with the expectation revised from $1.74 to $1.70, attributed to lower gross margins and increased advertising and promotion costs. Furthermore, the company’s organic sales outlook for fiscal year 2026 remains subdued at just +0.2%, indicating a weak growth trajectory and a potential slowdown in performance during the second half of the year.