3 Reasons CAG is Risky and 1 Stock to Buy Instead

Conagra has gotten torched over the last six months - since May 2025, its stock price has dropped 22.5% to $17.75 per share. This may have investors wondering how to approach the situation.

Is there a buying opportunity in Conagra, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free for active Edge members.

Why Do We Think Conagra Will Underperform?

Even with the cheaper entry price, we're swiping left on Conagra for now. Here are three reasons you should be careful with CAG and a stock we'd rather own.

1. Demand Slipping as Sales Volumes Decline

Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful staples business as there’s a ceiling to what consumers will pay for everyday goods; they can always trade down to non-branded products if the branded versions are too expensive.

Conagra’s average quarterly sales volumes have shrunk by 1.8% over the last two years. This decrease isn’t ideal because the quantity demanded for consumer staples products is typically stable.

2. Revenue Projections Show Stormy Skies Ahead

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Conagra’s revenue to drop by 2%, close to This projection doesn't excite us and indicates its newer products will not lead to better top-line performance yet.

3. Previous Growth Initiatives Haven’t Impressed

Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Conagra historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 5.3%, somewhat low compared to the best consumer staples companies that consistently pump out 20%+.

Final Judgment

Conagra falls short of our quality standards. Following the recent decline, the stock trades at 9.9× forward P/E (or $17.75 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are better stocks to buy right now. We’d suggest looking at an all-weather company that owns household favorite Taco Bell.

Stocks We Like More Than Conagra

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

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