CAG

Defensive

Conagra Brands

Price Chart

Market Data

Financials

XBRL · SEC EDGAR

2008–2025(18yr)

Revenue

Net Income

Free CF

Metric	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$11.2B	$12.3B	$12.0B	$12.4B	$1.6B	$1.7B	$1.7B	$1.6B	$1.5B	$7.8B	$7.9B	$9.5B	$11.1B	$11.2B	$11.5B	$12.3B	$12.1B	$11.6B	-3.6%
Gross Profit	$2.7B	$2.8B	$3.0B	$2.9B	-$9.0B	-$8.4B	-$7.2B	-$5.1B	-$4.7B	$2.3B	$2.4B	$2.7B	$3.1B	$3.2B	$2.8B	$3.3B	$3.3B	$3.0B	-9.9%
Gross Margin	23.6%	22.5%	25.4%	23.4%	-559.7%	-494.4%	-424.2%	-321.1%	-315.7%	29.9%	29.6%	27.8%	27.8%	28.4%	24.6%	26.6%	27.7%	25.9%	-1.8pp
Operating Income	—	$1.5B	$1.6B	$1.6B	$1.6B	$1.8B	$1.3B	$181.5M	$1.7B	$1.2B	$1.4B	$1.6B	$1.8B	$2.1B	$1.6B	$1.5B	$1.2B	$1.4B	+16.1%
Operating Margin	—	12.0%	13.7%	13.3%	100.0%	108.3%	76.4%	11.3%	114.7%	15.8%	17.8%	17.2%	16.4%	19.1%	13.8%	11.9%	9.8%	11.8%	+2.0pp
Net Income	$930.6M	$978.4M	$725.8M	$817.0M	$467.9M	$773.9M	$303.1M	-$252.6M	-$677.0M	$639.3M	$808.4M	$678.3M	$840.1M	$1.3B	$888.2M	$683.6M	$347.2M	$1.2B	+231.9%
Net Margin	8.3%	7.9%	6.0%	6.6%	29.2%	45.5%	17.8%	-15.8%	-45.1%	8.2%	10.2%	7.1%	7.6%	11.6%	7.7%	5.6%	2.9%	9.9%	+7.0pp
Free Cash Flow	-$336.3M	-$305.6M	$989.8M	$886.1M	$715.3M	$953.5M	$948.8M	$1.0B	$777.6M	$933.4M	$702.6M	$772.4M	$1.5B	$961.7M	$712.9M	$633.2M	$1.6B	$1.3B	-20.0%
FCF Margin	-3.0%	-2.5%	8.2%	7.2%	44.7%	56.1%	55.8%	63.0%	51.8%	11.9%	8.9%	8.1%	13.3%	8.6%	6.2%	5.2%	13.5%	11.2%	-2.3pp
EPS (Diluted)	$1.90	$2.15	$1.62	$1.88	$1.12	$1.85	$0.70	$-0.60	$-1.56	$1.46	$1.98	$1.52	$1.72	$2.66	$1.84	$1.42	$0.72	$2.40	+233.3%

Total Debt$7.3B

Cash & Equiv.$68.0M

Net Debt$7.2B

4 min read

1. THE BIG PICTURE

Conagra Brands is currently a business in retreat, caught between a $8.07 billion debt pile and a consumer base that is pulling back from its branded staples. While management points to a "refuse-to-lose" culture, the financial reality is a company with negative net margins and a 6.8% drop in quarterly revenue that suggests its iconic brands are losing their pull in a "challenging consumer environment" (8-K).

2. WHERE THE RISKS HIT HARDEST

Conagra’s Brand Portfolio is threatened by Goodwill Impairment Risk because Conagra Brands carries $10.50 billion in goodwill—nearly equal to its entire annual revenue—which could face massive write-downs if competitive pressures continue to erode the fair value of these acquired businesses (10-K Item 1A). Furthermore, its Pricing Initiatives are threatened by Customer Concentration; because Walmart and its affiliates control 29% of Conagra's sales, Conagra Brands has limited leverage to pass through "elevated input cost inflation" without risking the loss of its most critical distribution channel (10-Q). Finally, the strategic goal of Sustainable Growth is undermined by Debt Obligations, as the $8.07 billion in total debt restricts the cash flow available for the "increased merchandising and A&P investment" that management claims is necessary for a second-half recovery (8-K).

3. WHAT THE NUMBERS SAY TOGETHER

The financial data reveals a company that is underperforming its peers on almost every growth and efficiency metric. Conagra’s revenue growth of -3.6% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter is the worst in its peer group, trailing even other struggling giants like Kraft Heinz (XBRL). While management expresses confidence in "underlying momentum," the most recent quarter showed an 8.5% sales collapse in the Grocery & Snacks segment, a significant acceleration of the downward trend (8-K).

This divergence between management’s optimism and the actual results is reflected in the market sentiment: short interest sits at 8.7% of the float, suggesting a significant number of investors are betting against a recovery (Yahoo Finance). While Conagra Brands maintains a 24.8% gross margin, this sits at the bottom of its peer group, well below McCormick (37.8%) and Clorox (43.4%), indicating that Conagra’s "value-added" products may not command the same pricing power as its rivals.

4. IS IT WORTH IT AT THIS PRICE?

At a 10.0x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, the market is pricing in a stagnant 0.5% long-term growth rate (CAPM analysis). This represents a 32% discount to the peer median of 14.8x, a valuation that would typically signal an "attractively valued" entry point. However, this discount is justified by Conagra Brands’s 7.5x net leverage and its recent net loss of $664 million (8-K).

For this price to be right, Conagra must prove it can hit its adjusted operating margin guidance of 11.0% to 11.5%, a feat that seems difficult given the current GAAPGAAPGenerally Accepted Accounting Principles — the standard U.S. accounting rules all public companies must follow operating margin of 5.3% (XBRL). While the 7.5% dividend yield is the highest among its peers, the lack of buyback activity (0.2% yield) and the heavy debt burden suggest that shareholder returns are secondary to keeping the business afloat. If growth were to slow even marginally below the market's 0.5% expectation, the justified valuation would likely contract further.

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if organic net sales in the Refrigerated & Frozen segment (currently -5.1%) do not stabilize, as this would signal a structural loss of brand equity in its core categories.
Cautious if Conagra Brands records a material impairment charge against its $10.50 billion goodwill balance, which would signal that management no longer expects its brands to return to historical growth levels.
Constructive if net debt falls significantly from the current $7.6 billion level, which would free up cash for the "innovation pipeline" management frequently cites as its primary growth lever.

6. BOTTOM LINE

Structural Advantage: A portfolio of high-recognition brands like Slim Jim and Birds Eye that maintain deep, essential shelf-space integration with the world’s largest retailers.

Bottom Line: Conagra is a high-risk turnaround play where a massive debt load and deteriorating sales volume currently make its high dividend yield look more like a warning than an opportunity.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Debt Obligations: Conagra Brands carries approximately $8.07 billion in total debt, including $7.02 billion in senior notes. This leverage restricts Conagra Brands’s ability to fund working capital, pay dividends, or repurchase shares, and increases vulnerability to interest rate volatility.
Customer Concentration: Walmart, Inc. and its affiliates represented approximately 29% of consolidated net sales in fiscal 2025. The loss of this customer or a material reduction in their purchasing volume would significantly impact total revenue.
Goodwill and Intangible Asset Impairment: Conagra Brands holds $10.50 billion in goodwill and $2.42 billion in other intangibles. These assets are subject to annual impairment testing; factors such as increased competition, reduced demand, or lower profit growth could trigger impairment charges that negatively impact net worth.
Input Cost Inflation: Conagra Brands faces material and rapid increases in the cost of raw materials, labor, energy, and logistics. While Conagra Brands uses hedging and pricing strategies to offset these costs, it may not be able to fully or timely pass these increases to consumers, threatening operating margins.
Supply Chain and Third-Party Dependency: Conagra Brands relies on a wide array of third parties for manufacturing, distribution, and information systems. Disruptions—such as the fiscal 2023 cybersecurity incident at a third-party vendor that resulted in $4.4 million in charges—can directly impair the ability to fulfill customer orders and maintain profitability.

2. Company-Specific Risks

Seasonality of Demand: Revenue and cash flows are subject to seasonal cyclicality, with frozen food sales peaking in winter and pie sales peaking in November and December, making sequential quarterly comparisons unreliable for performance evaluation.
Licensing Dependencies: Conagra Brands operates under various licensing arrangements, including agreements with Dolly Parton and trademarks such as P.F. Chang’s®, Bertolli®, Wendy’s®, and Libby’s®. Failure to renew or renegotiate these agreements could materially affect financial results.
Subsidiary Structure: Conagra Brands relies on dividends, loans, or advances from its subsidiaries to service its debt. These subsidiaries are distinct legal entities with no obligation to provide funds, and their ability to pay is subject to statutory and contractual restrictions.
Technological Transformation Costs: Conagra Brands is investing in automation, artificial intelligence, and connected data. These investments carry the risk of higher-than-anticipated costs, periods of decreased production, or failure to achieve intended financial benefits.

3. Regulatory/Legal Risks

Food Safety and Labeling: Conagra Brands is subject to strict liability standards under the Federal Food, Drug & Cosmetic Act and other regulations. Product recalls, contamination, or allegations of deceptive labeling can lead to significant defense costs, fines, and damage to brand reputation.
Environmental Regulation: Operations are subject to stringent EPA and state regulations regarding waste disposal and emissions. Increasing mandates to limit greenhouse gases may result in higher compliance costs and capital expenditures.
Data Privacy: Conagra Brands must comply with various global data protection laws, including the GDPR and the California Privacy Rights Act. Failure to secure personal data or comply with these regulations can result in litigation, fines, and reputational harm.

4. Financial Impact Map

Debt Obligations → Cash Flow from Operations → Significant portion of cash flow required for debt service, limiting funds for capital expenditures and dividends. Customer Concentration → Consolidated Net Sales → 29% of sales are tied to a single customer (Walmart, Inc.), creating high sensitivity to their purchasing decisions. Goodwill and Intangible Asset Impairment → Net Worth → Impairment charges directly reduce the carrying value of assets on the balance sheet. Input Cost Inflation → Cost of Goods Sold / Gross Margin → Unoffset commodity and input price increases directly compress gross margins. Supply Chain Disruptions → Operating Results → Third-party system failures or logistics issues can lead to direct charges (e.g., $4.4 million in fiscal 2023) and lost revenue from inability to fulfill orders.

Source: 10-K Item 1A · LLM Analysis