Home Stock Should you invest in ConAgra Brands after posting solid FQ1 results?

Should you invest in ConAgra Brands after posting solid FQ1 results?


On Thursday, ConAgra Brands Inc. (NYSE:CAG) shares edged slightly lower after announcing its fiscal Q1 results. The company reported its most recent quarterly results before markets opened, beating analyst expectations on revenue and earnings.

ConAgra posted FQ1 non-GAAP earnings per share of $0.50, slightly outperforming the consensus Street estimate of $0.49. Moreover, its GAAP EPS of $0.49, also beat the expectation of $0.47, while revenue for the quarter of $2.65 billion was $120 million ahead of expectations, despite registering a slight Y/Y decline of 1.1%.

ConAgra also reaffirmed its fiscal year 2020 earnings guidance of about $2.50 per share, ahead of the average for analyst expectations of $2.46.

ConAgra looks undervalued

From an investment perspective, ConAgra Brands trades at an exciting P/E ratio of 12.95, making the stock attractive for value investors. Moreover, analysts expect the company’s bottom line to improve by nearly 55% this year, before rising by a further 8.81% next year.

Therefore, CAG also looks like a compelling opportunity for short-term growth investors. In addition, its dividend yield of about 3.36%, as of this writing, could get the attention of dividend investors.

Source – TradingView

Is a pullback near?

Technically, ConAgra shares seem to be trading within an ascending channel formation in the intraday chart. As a result, the stock has rallied closer to the 100-day moving average, creating an opportunity for a pullback.

However, ConAgra still has room left to run before hitting overbought conditions of the 14-day RSI. Therefore, the stock could breach the 100-day MA, moving towards the trendline resistance. 

Investors could target extended gains at about $35.54, or higher at $36.55, while $33.53 and $32.52 are crucial support zones.

It could be time to buy CAG shares

In summary, although ConAgra shares are up nearly 7% since 5th August, the stock is still down more than 4% this year and approaching an 8% decline over the last 12 months.

Therefore, its impressive FQ1 performance and market-beating earnings guidance could be catalysts for a significant surge in the stock price.

The post Should you invest in ConAgra Brands after posting solid FQ1 results? appeared first on Invezz.

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