Conagra Brands, Inc. Beats EPS and Beats Revenue in Q1 2027

Conagra Brands, Inc. (NYSE: CAG) reported its first quarter results for fiscal year 2027, revealing a mixed performance. The company experienced a reported net sales decrease of $36.7 million, or -1.4% year-over-year (YoY), totaling $2.6 billion. However, diluted earnings per share (EPS) rose to $0.36, reflecting a 5.9% increase from the prior year.

Despite the decline in sales, the growth in earnings indicates that Conagra is managing its costs effectively, which is a positive sign for shareholders. The increase in EPS suggests that the company is able to maintain profitability even in a challenging market environment.

Key Metrics:

• Net Sales: $2.6 billion, down $36.7 million or -1.4% YoY
• Organic Net Sales: Decreased 1.1%
• Diluted EPS: $0.36, up 5.9% YoY
• Adjusted EPS: $0.41, up 5.1% YoY
• Operating Margin: 10.3%
• Adjusted Operating Margin: 11.5%
• Net Income: $174 million, up 6.0% YoY
• Free Cash Flow: ($128 million), a decrease of $102 million YoY

Analyst Opinion:

This quarter presents a mixed bag for shareholders. While the decline in net sales is concerning, the growth in earnings per share and net income demonstrates that Conagra is effectively managing its operational costs and capitalizing on its pricing strategies. The reaffirmation of fiscal 2027 guidance, which includes an organic net sales change of -3% to -1%, suggests that the company is preparing for a challenging year ahead but remains confident in its ability to navigate these headwinds.

Operational Highlights:

• Gross Profit: Decreased 3.4% to $619 million, with a gross margin of 23.8%.
• Selling, General, and Administrative Expenses (SG&A): Increased 4.4% to $350 million, primarily due to legacy legal matters.
• Equity Method Investment Earnings: Increased 71.8% to $50 million, driven by favorable market conditions.
• Net Interest Expense: Decreased 2.1% to $92 million due to a reduction in total debt.

Dividend and Share Buyback:

Conagra paid a dividend of $0.35 per share, consistent with the prior year. The company also repurchased $44 million of its common shares during the quarter, indicating a commitment to returning value to shareholders.

Guidance and Future Catalysts:

Conagra Brands has reaffirmed its fiscal 2027 guidance, which includes:

• Organic Net Sales Change: Expected to be between -3% and -1%.
• Adjusted Operating Margin: Projected between 10.0% and 10.5%.
• Adjusted EPS: Anticipated to be between $1.40 and $1.50.

Investors should closely monitor the company's ability to execute on its strategic priorities, including restoring margins and increasing investment. Additionally, the upcoming quarters will be critical as Conagra navigates the challenges posed by inflation and changing consumer preferences.

In conclusion, while the decline in sales is a concern, the growth in earnings and the reaffirmation of guidance suggest that Conagra Brands is on a path to stabilize and potentially grow in the coming quarters. Investors should remain cautiously optimistic as the company continues to adapt to the evolving market landscape.

Note: The following tables present amounts in millions.

Quarterly Earnings — Revenue vs. Estimate

Revenue vs. Estimate — 5 Quarters

EPS vs. Estimate — 5 Quarters

Analyst Ratings & Price Targets

Analysts have recently taken a cautious stance on Conagra Brands (CAG), with multiple downgrades in 2026. Bernstein cut its rating from Market Perform to Underperform with a $12 target, while BNP Paribas Exane and Wells Fargo similarly downgraded the stock to Neutral and Underweight, respectively, with targets of $16 and $15. BTIG and UBS initiated coverage at Neutral, with no price targets specified, and JPMorgan resumed coverage with a Neutral rating and a $20 target. The consensus price target, based on available data, suggests limited upside from current levels, with some analysts projecting downside risk. The recent downgrades reflect growing concerns over Conagra's near-term performance, prompting a more conservative outlook among Wall Street firms. The mixed sentiment indicates uncertainty, with the stock likely to remain range-bound unless fundamentals improve.

Technical Analysis — 90-Day Price Chart

Conagra Brands, Inc. (CAG) exhibits a bearish technical posture, trading at $13.44 below all key moving averages (SMA20: $14.87, SMA50: $15.20), confirming sustained downward momentum. The SMA20 has crossed below the SMA50, reinforcing short-term weakness. The RSI(14) at 24.0 indicates deeply oversold conditions, suggesting potential for a near-term relief rally, though the broader downtrend remains intact. Volume surged to 37.44M shares—nearly triple the 20-day average—reflecting strong selling pressure. Positioned closer to its 52-week low ($12.39) than high ($16.74), CAG faces immediate support near recent lows, while resistance aligns with the SMA20 at $14.87. A sustained break below $12.39 could accelerate declines, whereas reclaiming the SMA20 may signal short-term stabilization. The technical setup favors caution unless RSI recovers above 30 and price stabilizes above key MAs.