CAG
New CEO, same skeptical note
ConAgra just handed the keys to John Brase, set to become president and CEO on June 1, and BofA basically responded with a polite shrug. The firm reiterated Underperform and kept its $15 target, which is not exactly the kind of post-announce confetti companies hope for.
Why the bears are still growling
BofA’s argument is pretty simple: the new boss inherits a grocery-brand machine that’s trying to outrun inflation, defend margins, and keep earnings from getting squeezed like a tube of toothpaste.
The bank pointed to a few pressure points:
- Fiscal 2026 EPS is already getting hit by inflation
- Fiscal 2027 EPS growth could stay under pressure
- The dividend payout ratio is running above 80%, while BofA wants something closer to 50% to 55%
- Net debt to EBITDA sits around 3.8x, which leaves less wiggle room if business gets bumpy
Dividend lover, balance-sheet hater
ConAgra still looks like a classic income-stock comfort food pick — a 9.2% yield and a 51-year streak of dividend payments will do that. But the market has a nasty habit of asking a simple question: is the payout a feature, or a warning label?
That’s why BofA floated a familiar corporate soap-opera plot twist: asset sales. It mentioned brands like Hebrew National and Odom’s Tennessee Pride as possible ways to help de-leverage the balance sheet. Translation: sell a few pantry staples so the pantry can stop eating the company alive.
The investor takeaway
Brase gets a fresh start, but the math hasn’t magically improved. ConAgra still has to prove it can protect margins, calm the debt stack, and keep that dividend from becoming a giant overhang.
Big picture: a new CEO can change the mood, but it doesn’t automatically change the spreadsheet.