Things to note as Conagra Brands (CAG) lines up for fourth quarter earnings


Trademarks Conagra, Inc. CAG is expected to report revenue and earnings growth when it reports its fiscal 2022 fourth quarter results on July 14. quarterly reported figure. The consensus score for fiscal 2022 revenue is set at $11,547 million, indicating growth of 3.2% from the figure reported a year ago.

Zacks’ consensus estimate for quarterly earnings was flat for the past 30 days at 64 cents per share, suggesting an 18.5% increase from the figure reported in the year-ago quarter. The company’s consensus mark for fiscal 2022 net income is set at $2.35 per share, indicating a decline of nearly 11% from the prior year’s reported figure. Conagra Brands, a consumer packaged food company, has a four-quarter earnings surprise of 0.5%, on average. CAG delivered a 1.8% profit surprise in the last quarter reported.

Conagra Brand Pricing, Consensus, and EPS Surprise

Conagra Brands price-consensus-eps-surprise-chart | Citation of Conagra brands

Things to note

Conagra benefits from its investments in e-commerce, which pays off well. The continued focus on innovation helps the company capture market share in the snack, frozen, and staple food categories. Careful innovations have helped Conagra modernize its portfolio and aptly respond to changing consumer needs. The recovery of its Foodservice activity with the recovery of restaurant traffic is promoting growth.

On its most recent earnings call, management highlighted that it was benefiting from better than expected consumer demand, lower than expected demand elasticities and higher expected pricing actions. The company expects organic net sales growth of nearly 7% in the fourth quarter of fiscal 2022. Adjusted earnings per share (EPS) is expected to be around 64 cents in the quarter to report. Management expects organic net sales growth of nearly 4%, while adjusted EPS is expected at around $2.35 for fiscal 2022.

Yet Conagra is fighting the inflation of the high cost of goods sold. On its last call, management pointed out that costs were particularly high for transportation and protein, which remained high as the company entered the fourth fiscal quarter. The company pointed out that while it is taking the necessary steps on pricing and savings, these are unlikely to have fully offset input cost inflation in fiscal 2022 due to a lag between the announcement and the implementation of these measures. The company expects gross inflation of nearly 16% in the fourth quarter and fiscal year 2022.

What the Zacks Model Reveals

Our proven model does not predict an earnings beat for Conagra this time around. The combination of a positive Earnings ESP and a Zacks rank of #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of beating Earnings. You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.

Conagra carries a Zacks rank #4 (sell) and an ESP gain of 0.00%.

Some actions with favorable combinations

Here are a few companies you might want to consider, as our model shows that they have the right combination of elements to post a pace of profit.

Archer Daniels ADM currently has an earnings ESP of +2.59% and a Zacks ranking of 3. The company is expected to record an earnings boost when it reports Q2 2022 results. ADM’s quarterly earnings rose nearly 3% over the past seven days to $1.74 per share. The consensus mark indicates growth of 30.8% over the number reported for the prior year quarter. You can see the full list of today’s Zacks #1 Rank stocks here.

Archer Daniels revenue is expected to grow year over year. Zacks’ consensus estimate for quarterly revenue is pegged at $25.3 billion, suggesting a 10.2% increase from the figure reported in the year-ago quarter. ADM has recorded a profit rate of 22.3%, on average, over the past four quarters.

Corteva CTVA currently has an earnings ESP of +8.12% and a Zacks ranking of 3. The company will likely see an increase in net income when it reports Q2 2022 results. Quarterly earnings remained unchanged at $1.46 per share over the past 30 days. The consensus mark for CTVA suggests growth of 4.3% from the number reported a year ago.

Corteva’s revenue is expected to grow year over year. Zacks’ consensus estimate for quarterly revenue is pegged at $6.2 billion, suggesting a 9.4% increase over the figure reported in the year-ago quarter. CTVA has recorded a profit pace of 22.3%, on average, over the past four quarters.

Philip Morris International PM currently has an Earnings ESP of +0.95% and a Zacks Rank of 3. The company is likely to experience lower and lower earnings declines when it reports Q2 2022 results. PM’s quarterly revenue is pegged at $6.53 billion, suggesting a drop of nearly 14% from the figure reported in the year-ago quarter.

Philip Morris’ quarterly earnings consensus mark rose a penny in the past 30 days to $1.23 a share. PM’s second-quarter consensus earnings estimate suggests a 21.7% decline from the figure released a year ago. PM has posted a 3.5% profit beat, on average, over the past four quarters.

Stay on top of upcoming earnings announcements with Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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