Earnings Previews: Conagra, Constellation Brands, Lamb Weston
No notable earnings were released late Monday or early Tuesday.
Before U.S. markets open on Wednesday, cannabis products company Tilray will report quarterly results.
Here are our previews of three companies set to report results first thing Thursday morning.
Conagra
Over the past 12 months, the share price of packaged food giant Conagra Brands Inc. (NYSE: CAG) has fallen by around 18%. For the year to date, however, the stock is down nearly 31%.
The stock’s price is tracking both revenue and adjusted earnings per share (EPS), both of which have declined for three consecutive quarters. EPS met the lowered expectations in each quarter, as did sales in two of the three quarters. On its conference call following its July report, the company, CEO Sean Connolly noted that sales volumes were slipping even as prices were falling. And it is not just Conagra’s problem, he said.
Of 16 analysts following the stock, 12 have Hold ratings and the other four rate it at Buy or Strong Buy. At a recent price of around $26.80 a share, the upside potential based on a median price target of $36.50 is 36.2%. At the high price target of $46.50, the upside potential is 73.5%.
The consensus estimate for first-quarter fiscal 2024 revenue is $2.96 billion, which would be down about 0.6% sequentially but up 2.0% year over year. Adjusted earnings per share (EPS) are expected to come in at $0.60, down 3.5% sequentially and 5.3% higher year over year. Estimates for the fiscal year that ends in May call for EPS of $2.72, down 1.5%, on sales of $12.39 billion, up 0.9%.
Conagra Brands stock trades at 9.87 times expected 2024 EPS, 9.4 times estimated 2025 earnings of $2.83 and 8.9 times estimated 2026 earnings of $2.98 per share. The 52-week trading range is $26.61 to $41.30. The low was posted early Tuesday. The company pays an annual dividend of $1.32 (yield of 5.23%). Total shareholder return over the past 12 months was negative 15.32%.
Constellation Brands
Constellation Brands Inc. (NYSE: STZ) produces, imports and sells beer, wine and spirits in the United States and other countries. With a market cap of around $45.3 billion, it is the country’s largest publicly traded alcoholic beverage stock. The stock price has added 8.4% over the past 12 months and about 7.5% for the year to date.
The company has struck a deal with activist investor Elliott Management, and sales of its Bud Light brand (the subject of a boycott earlier this year) have essentially been replaced by sales of Corona Light, another Constellation brand.
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