Conagra Brands (CAG) missed expectations on fiscal Q3 organic growth and earnings per share due to supply chain issues and a tough consumer environment, but the company reiterated its fiscal year guidance amid projections for continued strong consumption, RBC Capital Markets said in a note Friday.
The firm said it remains on the sidelines regarding the company's stock due to the elevated level of volatility in the operating environment.
RBC analysts said the company reported a 3.8% increase in snacking volumes during the quarter but posted "underwhelming" organic growth of -5.2% driven by softness across all segments, largely due to supply chain issues that impacted the company's topline and profitability.
The firm lowered its fiscal 2025 organic sales outlook to -2% from the previous -1.8%, in line with the company's -2% guidance and lower-than-expected fiscal Q3 net sales, while maintaining its EPS estimate of $2.35. The company has also projected an adjusted EPS of about $2.35 for the fiscal year.
RBC maintained its stock rating of sector perform and price target of $27 for Conagra.
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