Conagra Brands Sees Biggest Gain Since 1975

Shares of Conagra were rallying after an earnings beat this week.

The stock saw its biggest gain since 1975 on heavy volume this Thursday.

The parent company of consumer-goods brands Birds Eye, Healthy Choice, Slim Jim and Duncan Hines, reported second quarter financial results that revealed a beat in sales expectations for the first time in six quarters.

Conagra reported net income that rose to $260.5 million, or 53 cents a share, from $131.6 million, or 31 cents a share. Excluding nonrecurring items, adjusted earnings per share were 63 cents. This beat the FactSet consensus of 57 cents.

Net sales increased 18.3% to $2.82 billion, above the FactSet consensus of $2.80 billion, with all four business segments showing growth. For the last five quarters Conagra had missed sales expectations, according to FactSet data.

“We maintained our strong momentum in frozen and snacks,” Chief Executive Sean Connolly said in a statement. “We also made good progress on our large grocery brands, Hunt’s and Chef Boyardee, both of which made sequential improvements.”
Shares of Conagra soared 15.9% to $33.66, its highest closing price since November 13th of last year.

That was the stock’s best one-day performance since it shot up 31.3% on Feb. 3, 1975, according to data provided by FactSet.

Looking ahead, Conagra updated its fiscal 2020 guidance ranges and now expects net sales growth of 13.5% to 14.0%, up from previous guidance of 12.4% to 12.9%, and lifted the adjusted EPS guidance to $2.08 to $2.18 from $2.07 to $2.17.
Analyst Arun Sundaram at CFRA reiterated a buy rating on Conagra’s stock and increased his price target to $40 from $38.

He wrote, “Overall, it was a great quarter for [Conagra] and the future only looks brighter from here, barring any unexpected roadblocks, which we’ve unfortunately seen from time to time.”
Conagra shares are up 57.6% YTD.

Disclaimer: We have no position in Conagra Brands Inc. (NYSE: CAG) and have not been compensated for this article.