Why UBS Upgraded Conagra Brands Stock

On October 8, UBS analyst Steven Strycula upgraded Conagra Brands (CAG) stock to “buy” from “neutral.” He increased the target price to $40 per share on Conagra Brands stock from $38, which reflects an upside potential of 15.4% based on the closing price of $34.65 on October 8. Strycula thinks that the synergies from the Pinnacle Foods acquisition, the improved volume, and the company’s improved mix with less discounting could drive long-term growth. Conagra Brands announced the Pinnacle Foods acquisition on June 27 for ~$10.9 billion, which includes Pinnacle Foods’ net debt of $2.7 billion.