Conagra Brands' (CAG) Q1 Earnings Upcoming: Things to Note

Conagra Brands, Inc. CAG is likely to register top and bottom-line growth from the respective year-ago fiscal quarter’s readings when it reports first-quarter fiscal 2023 earnings on Oct 6. The Zacks Consensus Estimate for quarterly revenues is pegged at $2,819 million, suggesting a rise of 6.2% from the prior-year fiscal quarter’s reported figure.

The Zacks Consensus Estimate for quarterly earnings has risen a cent in the past 30 days to 52 cents per share, indicating 4% growth from the figure reported in the prior-year fiscal quarter. The food company has a trailing four-quarter earnings surprise of 0.4%, on average. CAG delivered an earnings surprise of 1.6% in the last reported quarter.

Factors to Note

CAG is steadily gaining from recovery in its Foodservice business, with restaurant traffic picking up and outdoor movement rising. CAG’s Frozen business is doing particularly well. During the fourth quarter of fiscal 2022, Conagra Brands saw strength in core areas like plant-based protein and single-serve meals. On its last earnings call, management was encouraged about the ongoing prospects of the Frozen business. It expects operating margins to expand in its Refrigerated and Frozen segment during fiscal 2023.

Conagra Brands Price, Consensus and EPS Surprise

Conagra Brands price-consensus-eps-surprise-chart | Conagra Brands Quote

Conagra Brands’ efficient pricing initiatives have been cushioning the stock for a while despite cost headwinds. CAG is focused on its pricing actions as it expects increased cost of goods sold inflation in fiscal 2023. In the ongoing fiscal year, gross inflation (input cost inflation before hedging and other sourcing gains) is anticipated in the low-teens range. This apart, CAG intends to raise its SG&A investment for solidifying infrastructure, continuing automation and supporting talent. Additionally, CAG does not expect the solid performance from its Ardent Mills joint venture (as delivered in the back half of fiscal 2022) to continue through fiscal 2023.

Management expects continued strength in sales during fiscal 2023, courtesy of pricing actions, innovation and supply-chain enhancement efforts. In the full fiscal, organic net sales are anticipated to rise 4-5%. These factors also bode well for the quarter under review.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Conagra Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which isn’t the case here.

Conagra Brands has a Zacks Rank #3 and an Earnings ESP of -1.82%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.

Kellogg Company K currently has an Earnings ESP of +1.04% and a Zacks Rank of 3. K is expected to register top-line growth when it reports third-quarter 2022 numbers. The Zacks Consensus Estimate for Kellogg's quarterly revenues is pegged at $3.8 billion, which suggests growth of around 4% from the prior-year quarter’s reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Kellogg's quarterly earnings has dropped a penny in the past 30 days to 96 cents per share, suggesting a decline of 11.9% from the year-ago quarter’s tally. K delivered an earnings beat of 13.3%, on average, in the trailing four quarters.

Sysco Corporation SYY currently has an Earnings ESP of +0.36% and a Zacks Rank #3. SYY is likely to register top and bottom-line improvements when it reports first-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly EPS of 99 cents suggests a 19.3% improvement from the figure reported in the year-ago fiscal quarter.

The Zacks Consensus Estimate for Sysco’s quarterly revenues is pegged at $18.6 billion, which indicates an improvement of 13.1% from the figure reported in the prior-year fiscal quarter. SYY has a trailing four-quarter earnings surprise of 3.6%, on average.

Beyond Meat BYND currently has an Earnings ESP of +9.23% and a Zacks Rank of 3. BYND is likely to register a rise in the top line from the year-earlier quarter’s reported number when it reports third-quarter 2022 results. The Zacks Consensus Estimate for BYND’s quarterly revenues is pegged at $113.3 million, suggesting a rise of 6.4% from the figure reported in the prior-year fiscal quarter.

The consensus mark for Beyond Meat’s bottom line has improved a penny in the past 30 days to a loss of $1.10 per share. A loss of 87 cents was reported in the year-ago fiscal quarter.

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Conagra Brands (CAG) : Free Stock Analysis Report
 
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