CAG
CAG
REDUCE 2026-03-07
Model
DDM
Price at Report
$19.02
Base IV
$19.54
Bear IV
$14.00
Bull IV
$24.13
Entry Zone: 15-18 · Sell Above: 21
Bore Family Office
Valuation Report — Conagra Brands (CAG) • March 7, 2026
3-Stage DDM (Ke) • Discount Rate: 10.00% • Current Price: $19.02
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Conagra Brands (formerly ConAgra Foods) traces its origins to 1919 as a Nebraska grain-milling company. Through decades of acquisitions — including Lamb Weston, Pinnacle Foods (2018, $10.9B), and Birds Eye — it became one of North America's largest packaged food companies. Today it operates across four segments: Grocery & Snacks (~38% of revenue, brands like Hunt's, Slim Jim, Snack Pack, PAM), Refrigerated & Frozen (~35%, Birds Eye, Marie Callender's, Healthy Choice), International (~10%), and Foodservice (~17%). The $10.9B Pinnacle acquisition created a massive debt load that management has been slowly paying down. As of FY2025, net debt stands at $8.0B — nearly equal to the entire market cap. Revenue has declined three consecutive fiscal years as volume erosion from elevated pricing continues.📊 Financial Snapshot
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $11,185 | $11,536 | $12,277 | $12,051 | $11,613 |
| EBITDA ($M) | $2,164 | $1,721 | $1,445 | $1,254 | $1,755 |
| Operating Income ($M) | $1,776 | $1,346 | $1,075 | $853 | $1,365 |
| Net Income ($M) | $1,299 | $888 | $684 | $347 | $1,152 |
| EPS (diluted) | $2.66 | $1.84 | $1.42 | $0.72 | $2.40 |
| Free Cash Flow ($M) | $962 | $713 | $633 | $1,628 | $1,303 |
| Annual DPS | $1.038 | $1.250 | $1.320 | $1.400 | $1.400 |
| Total Debt ($M) | $9,006 | $8,980 | $9,234 | $8,441 | $8,068 |
| Rev YoY Growth | — | +3.1% | +6.4% | -1.8% | -3.6% |
📈 DDM Scenarios
$14
🔴 Bear
$20
📊 Base
$24
🚀 Bull
$19.02
Current Price
$20
Analyst Avg PT
📋 Full 10-Year Projection Tables
Bear Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.358 | $1.235 | $1.23 |
| Year 2 | Stage 1 | $1.317 | $1.089 | $2.32 |
| Year 3 | Stage 1 | $1.278 | $0.960 | $3.28 |
| Year 4 | Stage 1 | $1.239 | $0.847 | $4.13 |
| Year 5 | Stage 1 | $1.202 | $0.746 | $4.88 |
| Year 6 | Stage 2 | $1.214 | $0.685 | $5.56 |
| Year 7 | Stage 2 | $1.226 | $0.629 | $6.19 |
| Year 8 | Stage 2 | $1.239 | $0.578 | $6.77 |
| Year 9 | Stage 2 | $1.251 | $0.531 | $7.30 |
| Year 10 | Stage 2 | $1.264 | $0.487 | $7.79 |
| Terminal | — | TV=$16.11 | PV(TV)=$6.21 (44% of IV) |
Base Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.442 | $1.311 | $1.31 |
| Year 2 | Stage 1 | $1.485 | $1.227 | $2.54 |
| Year 3 | Stage 1 | $1.530 | $1.149 | $3.69 |
| Year 4 | Stage 1 | $1.576 | $1.076 | $4.76 |
| Year 5 | Stage 1 | $1.623 | $1.008 | $5.77 |
| Year 6 | Stage 2 | $1.664 | $0.939 | $6.71 |
| Year 7 | Stage 2 | $1.705 | $0.875 | $7.59 |
| Year 8 | Stage 2 | $1.748 | $0.815 | $8.40 |
| Year 9 | Stage 2 | $1.791 | $0.760 | $9.16 |
| Year 10 | Stage 2 | $1.836 | $0.708 | $9.87 |
| Terminal | — | TV=$25.10 | PV(TV)=$9.68 (50% of IV) |
Bull Scenario
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.484 | $1.349 | $1.35 |
| Year 2 | Stage 1 | $1.573 | $1.300 | $2.65 |
| Year 3 | Stage 1 | $1.667 | $1.253 | $3.90 |
| Year 4 | Stage 1 | $1.767 | $1.207 | $5.11 |
| Year 5 | Stage 1 | $1.874 | $1.163 | $6.27 |
| Year 6 | Stage 2 | $1.948 | $1.100 | $7.37 |
| Year 7 | Stage 2 | $2.026 | $1.040 | $8.41 |
| Year 8 | Stage 2 | $2.107 | $0.983 | $9.40 |
| Year 9 | Stage 2 | $2.192 | $0.930 | $10.32 |
| Year 10 | Stage 2 | $2.279 | $0.879 | $11.20 |
| Terminal | — | TV=$33.54 | PV(TV)=$12.93 (54% of IV) |
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.0% | $24 | $25 | $27 | $28 | $30 |
| 8.5% | $22 | $23 | $24 | $26 | $27 |
| 9.0% | $21 | $22 | $23 | $24 | $25 |
| 9.5% | $19 | $20 | $21 | $22 | $23 |
| 10.0% | $18 | $19 | $20 | $20 | $21 |
| 10.5% | $17 | $18 | $18 | $19 | $20 |
| 11.0% | $16 | $17 | $17 | $18 | $18 |
| 11.5% | $16 | $16 | $16 | $17 | $17 |
| 12.0% | $15 | $15 | $15 | $16 | $16 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Ticker | Company | P/E | EV/EBITDA | Div Yield |
|---|---|---|---|---|
| CAG | Conagra Brands (current) | 7.9x | 7.8x | 7.4% |
| GIS | General Mills | 10.8x | 9.5x | 5.5% |
| CPB | Campbell Soup | 13.2x | 11.8x | 3.9% |
| HRL | Hormel Foods | 17.4x | 10.5x | 3.8% |
| SJM | J.M. Smucker | 10.5x | 8.9x | 4.1% |
| CAG | 5-yr avg (own history) | 14.0x | 11.0x | 3.5% |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $1.400 |
| Current Yield | 7.36% |
| Consecutive Growth Years | 0 |
| 1-yr DPS CAGR | +0.0% |
| 3-yr DPS CAGR | +2.1% |
| 5-yr DPS CAGR | +6.2% |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 58.3% |
| FCF Payout Ratio | 51.4% |
| Sustainability Verdict | Watch ⚠️ |
DPS frozen since Q3 FY2023 — first freeze in years signals management is prioritizing debt paydown. FCF payout of 51% is sustainable on FCF alone (FCF/share = $2.72 vs. DPS $1.40). However, net debt of $8.0B vs. market cap $9.1B is extreme leverage — any EBITDA deterioration could jeopardize dividend. EPS payout of 58% looks manageable but EPS has been volatile. Verdict: Watch — dividend is technically covered but growth resumption requires successful deleveraging.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| FY2023 | $1.42 | — | — | — | Actual |
| FY2024 | $0.72 | — | — | — | Actual |
| FY2025 | $2.40 | — | — | — | Actual |
| FY2026E | $1.66 | $1.74 | $1.89 | 19 | Estimate |
| FY2027E | $1.68 | $1.83 | $2.03 | 19 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| FY2023 | $12.3B | — | — | — | Actual |
| FY2024 | $12.1B | — | — | — | Actual |
| FY2025 | $11.6B | — | — | — | Actual |
| FY2026E | $10.8B | $11.3B | $11.9B | 19 | Estimate |
| FY2027E | $10.8B | $11.2B | $11.8B | 19 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $19.50 | Range $16–$26
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Street High | Various | Buy | $26 | +36.7% |
| Megan Alexander | Morgan Stanley | Hold | $19 | -0.1% |
| Chris Carey | Wells Fargo | Hold | $18 | -5.4% |
| Bryan Adams | UBS | Hold | $18 | -5.4% |
| Steve Powers | Deutsche Bank | Hold | $18 | -5.4% |
| Street Low | Various | Sell | $16 | -15.9% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q2 FY2025 | $0.64 vs $0.60 | +$0.04 ✅ | $3.0B vs $2.9B | +$0.0B ✅ | Maintained |
| Q3 FY2025 | $0.71 vs $0.68 | +$0.03 ✅ | $2.9B vs $2.9B | +$0.0B ✅ | Maintained |
| Q1 FY2026 | $0.45 vs $0.50 | $-0.05 ❌ | $2.8B vs $2.8B | $-0.0B ❌ | Lowered |
| Q2 FY2026 | $0.52 vs $0.48 | +$0.04 ✅ | $2.8B vs $2.8B | +$0.0B ✅ | Maintained |
(e) Confidence Band Commentary
Analyst range on FY2026 EPS ($1.66–$1.89) is relatively tight — consensus expects normalization after FY2025's EPS of $2.40 which included one-time items. Revenue forecasts show continued modest decline (-2.3% FY2026, -0.9% FY2027). Earnings surprises have been mixed — 3 beats, 1 miss in last 4 quarters. The Q1 FY2026 miss and guidance cut was the most concerning data point, signaling renewed headwinds.
⚖️ DDM Verdict: REDUCE — Conagra Brands (CAG)
Current price: $19.02 | Analyst Avg PT: $19.50
$14
🔴 Bear
$20
📊 Base
$24
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$18 | Begin position |
| Tier 2 — Add | ≤$17 | Add on weakness |
| Tier 3 — Full | ≤$15 | Full allocation |
| Sell Alert | ≥$21 | Above fair value — consider trimming |
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 7,877.81 |
| Average Cost Basis | $26.72 |
| Current Market Value | $149,836 |
| Unrealized P&L | $-60,659 (-28.8%) |
| Annual Dividend Income | $0/yr |
| Yield on Cost | 0.00% |
| vs Target Position (~$200K) | $149,836 vs $200,000 (75% of target) |
Bore Family Office • Analysis generated by Lurch • Not investment advice.