Bullish stock to watch: Conagra Brands Inc (NYSE: CAG)

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Conagra Brands Inc (NYSE: CAG) stock rose over 4.2% on 26th September, 2019 (As of 12:49 pm GMT-4; Source: Google finance). For the first quarter of FY 20, Adjusted EBITDA increased by 35.4% to $481 million mainly due to the addition of Pinnacle’s operating profit. The adjusted gross profit increased 29% to $676 million.  The increases were mainly due to the net impact of the addition of Pinnacle’s gross profit and cost synergies, as well as the benefits of price/mix and supply chain productivity.

 

The company has posted 1.7% decline in organic net sales in the quarter was due to a 2.5% volume fall behind unplanned softness in the International and Foodservice segments as well as planned elasticity-driven declines in the Grocery & Snacks segment.  Price/mix rose 0.8% as favorable net pricing and mix were partially offset by the Company’s continued actions to underpin its brands with brand building investments with retailers. CAG has reported 12.5% rise in adjusted net income attributable to Conagra Brands to $210 million in the quarter.  The increase in adjusted net income attributable to Conagra Brands was mainly due to the addition of Pinnacle’s operating profit and cost synergies.  These benefits were partially offset by rise in interest expense, the removal of profit from the Sold Businesses, and lower

CAG in the first quarter of FY 20 has reported the adjusted earnings per share of 43 cents, beating the analysts’ estimates for the adjusted earnings per share of 38 cents. The company had reported the adjusted revenue growth of 30.3 percent to $2.39 billion in the first quarter of FY 20, missing the analysts’ estimates for revenue by $90 million. The net sales reflect a 35.8% growth from the acquisition of Pinnacle, a 3.7% net decline from the divestitures of the Wesson oil business, the Gelit business, and the Canadian Del Monte business, as well as the sale of the Trenton, Missouri production facility, a 0.1% decline from the impact of foreign exchange and a 1.7% decline in organic net sales.

For fiscal 2020, the company expects organic net sales growth to be of 1.0% to 1.5%, net sales growth to be of 13.5% to 14.0%, adjusted operating margin to be in the range of 16.2% to 16.8%, adjusted EPS to be in the range of $2.08 to $2.18 and free cash flow to be of approximately $1 billion.

 

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