Spinoff spotlight: Conagra Brands Inc.

Article Excerpt

CONAGRA BRANDS INC. $30 is a buy. The company (New York symbol CAG; Consumer sector; Shares outstanding: 478.2 million; Market cap: $14.3 billion; Dividend yield: 4.7%; Takeover Target Rating: Medium; www.conagra.com) spun off its potato-processing operations as Lamb Weston Holdings Inc. (New York symbol LW) in November 2016. Investors received one share of Lamb Weston for every three Conagra shares they held. The remaining firm makes a variety of popular foods, including Chef Boyardee canned pasta, Hunt’s tomato sauce, and Orville Redenbacher popcorn. Conagra’s sales in its fiscal 2024 fourth quarter, ended May 26, 2024, fell 2.3%, to $2.91 billion from $2.97 billion from a year earlier as cost-conscious consumers switched to cheaper alternatives. The lower sales also cut earnings before unusual items by 1.6%, to $0.61 a share (or a total of $293.6 million) from $0.62 a share (or $298.6 million). For fiscal 2025, Conagra expects its sales will decline about 0.75% compared to 2024. Its earnings for the year should also range from $2.60 to…