ConAgra Brands: JP Morgan downgrades to Neutral, PT drops to $20 from $25.

ConAgra Brands: JP Morgan downgrades to Neutral, PT drops to $20 from $25.

Title: JP Morgan Downgrades Conagra Brands to Neutral; Target Price Drops to $20

July 02, 2025 - JP Morgan Chase & Co. has downgraded Conagra Brands (NYSE:CAG) to a neutral rating, adjusting the price target from $25 to $20. This move comes amidst a challenging financial environment for the company, marked by inflation and tariff pressures. Analysts at JP Morgan cited these headwinds as reasons for the downgrade, noting that the company's exposure to tariffs, particularly those related to steel and aluminum, is a significant concern. Additionally, core inflation is anticipated to rise by 4%, further impacting Conagra Brands' financial performance [1].

Conagra Brands operates through four segments: Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice. The company's recent quarterly earnings report indicated a 4.3% year-over-year revenue decrease, with earnings per share (EPS) of $0.56 missing estimates. Analysts expect an EPS of $2.35 for the current year, reflecting the ongoing challenges the company faces [2].

Despite the recent earnings setback, Conagra Brands has been taking steps to mitigate these challenges. The company is focusing on volume over value in high-growth areas and prioritizing margins in cash-generative businesses. However, these strategies have not been enough to offset the downward revision in EPS estimates and the high dividend payout ratio, which stands at 58.58% [2].

Institutional investors have also been active in adjusting their positions in Conagra Brands. Gulf International Bank UK Ltd reduced its stake by 42.1% in the first quarter, while other investors such as Ameriprise Financial Inc. and Victory Capital Management Inc. have increased their positions. These moves reflect the varying sentiments among investors regarding the company's future prospects [2].

Conagra Brands' stock has been trading at a 7% yield, with a market cap of $9.17 billion and a P/E ratio of 8.02. The company's debt-to-equity ratio is 0.70, indicating a relatively low level of leverage. Despite the recent downgrade, the stock's fundamentals and the company's strategic efforts to navigate inflation and tariffs will be closely watched by investors and analysts [3].

References
[1] https://www.tipranks.com/news/ratings/conagra-brands-faces-sell-rating-amid-inflation-and-tariff-challenges-ratings
[2] https://www.marketbeat.com/instant-alerts/filing-gulf-international-bank-uk-ltd-lowers-position-in-conagra-brands-nysecag-2025-08-17/
[3] https://www.cnn.com/markets/stocks/CAG