Conagra Brands Faces Mounting Analyst Skepticism

Conagra Brands US2058871029

Shares of Conagra Brands are under renewed scrutiny following a wave of downward revisions from Wall Street analysts. While the stock's high dividend yield presents a potential lure for income-focused investors, persistent concerns over volume declines and intensifying competition from private-label alternatives are dominating the narrative. The central question now is whether the company's planned increase in marketing expenditure can catalyze a meaningful turnaround.

The company's fundamental performance continues to reflect significant pressure. For the first quarter of fiscal 2026, Conagra reported a 5.81% decline in revenue to $2.6 billion. Although adjusted earnings per share of $0.39 surpassed the $0.33 consensus estimate, the top-line contraction underscores ongoing demand challenges. The stock currently trades at a price-to-earnings ratio of approximately 9.9 and offers a dividend yield near 8.0%.

Institutional investor activity paints a mixed picture. CalPERS reduced its stake by 22.2% in the second quarter of 2025, selling 472,164 shares to hold roughly 1.66 million shares. Conversely, Norges Bank established a new position valued at about $172.5 million, and Jump Financial aggressively increased its holding by 155.5%, bringing its total to 286,244 shares. Overall, institutions control 83.75% of the company's outstanding shares.

The stock closed its latest session at €15.00, a level that represents a decline of approximately 44% from its value at the start of the year.

Analyst Sentiment Shifts to Caution

Market experts have recently adopted a more cautious stance. On December 11, the firm Stifel Nicolaus lowered its price target on Conagra to $19 from $21, maintaining a "Hold" recommendation. Analyst Matthew Smith cited uncertain volume trends, heightened competition from private labels, and the necessity for greater advertising spend as key reasons for the adjustment.

Jefferies followed suit, reducing its target to $18 from $19 and also reiterating a "Hold" rating. Their analysis highlighted particular softness in the Refrigerated & Frozen segment, where volumes for brands like Birds Eye and Banquet remained weak despite pricing actions. While the Grocery & Snacks unit showed sequential improvement—primarily driven by the Hunt’s brand—the overall outlook remains guarded.

Key Analyst Consensus Data:
- Stifel Nicolaus: Target reduced to $19 (from $21); Rating: Hold
- Jefferies: Target reduced to $18 (from $19); Rating: Hold
- Overall Consensus Rating: Reduce; Average Price Target: ~$20.42

Upcoming Catalyst and Strategic Crossroads

All eyes are now on the next quarterly report, scheduled for December 19, 2025, which will provide critical insight into the company's trajectory. The primary focus will be on whether increased marketing investments are successfully stabilizing market share against private-label rivals and if volume trends in the challenged Refrigerated & Frozen division are showing signs of recovery.

A positive development on these fronts could offer near-term support for the stock's valuation and its substantial dividend. However, should volumes remain depressed, the potential for a swift share price recovery appears limited. The current average analyst price target suggests only modest upside potential in the absence of a clear and demonstrable operational turnaround.