Zacks
0
All posts from Zacks
Zacks in Our Research. Your Success.,

ConAgra (CAG) Cuts Costs, Faces Competition: Hold it Now?

On Apr 5, 2016, we issued an updated research report on ConAgra Foods, Inc. CAG. The company is one of the leading food companies in North America which serves grocery retailers, restaurants and other foodservice establishments as well as most of the households. However, tough competition and volatile market conditions remain the concerns.

Bullish Elements

ConAgra is improving margins by lowering operational cost, enhancing productivity and attaining favorable limits of volume and price mix. The company also believes that successful divestiture of the Private Brand segment would improve liquidity and hence lower the debt burden. We believe that the company’s revenues and margins would increase on the back of effective marketing strategies.

Bearish Factors  

ConAgra faces intense competition which limits its pricing power. This may lead to market share loss and drag sales as well as operating margins in the near future. Moreover, the strengthening U.S. dollar is weighing on the company’s Consumer Foods and Commercial Foods segments’ revenues. Also, supply-demand inconsistency and unfavorable changes in governmental agricultural programs might hurt the Zacks Rank #3 (Hold) company in the near term.

Stocks to Consider

Some well-placed stocks in the industry are Campbell Soup Company CPB, Post Holdings, Inc. POST and Amplify Snack Brands, Inc. BETR. Both Campbell and Post Holdings sport a Zacks Rank #1 (Strong Buy), while Amplify Snack carries a Zacks Rank #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. http://www.zacks.com/registration/pfp/?ALERT=RPT_7BST_LP194&... blog">Click to get this free report >>      


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
CONAGRA FOODS (CAG): Free Stock Analysis Report
 
CAMPBELL SOUP (CPB): Free Stock Analysis Report
 
POST HOLDINGS (POST): Free Stock Analysis Report
 
AMPLIFY SNACK (BETR): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research