What Happened?
Shares of packaged foods company Conagra Brands (NYSE: CAG) jumped 4% in the afternoon session after the company reported third-quarter revenue that topped Wall Street estimates, while earnings were in line with expectations. For the third quarter of calendar year 2025, Conagra's revenue fell 5.8% year-over-year to $2.63 billion, but this figure beat analysts' forecasts of $2.61 billion. The result came amid a challenging environment, as sales volumes fell 1.2%. The company's GAAP earnings per share of $0.34 matched consensus estimates but represented a significant drop from $0.97 in the same quarter last year. Despite the mixed results, investors reacted positively to the revenue and organic growth beats, suggesting relief that the performance was better than feared given the difficult consumer backdrop.
After the initial pop the shares cooled down to $19.03, up 4.1% from previous close.
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What Is The Market Telling Us
Conagra’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock dropped 10.1% on the news that the company reported weak third-quarter (fiscal Q1 2025) earnings results. Its organic revenue and EPS missed Wall Street's estimates. While the top line reflected weaker pricing and volumes, management added that sales were also negatively impacted by "approximately $27 million due to temporary manufacturing disruptions in the Hebrew National business during the key grilling season." Overall, this quarter could have been better.
Conagra is down 31.2% since the beginning of the year, and at $19.03 per share, it is trading 41.8% below its 52-week high of $32.72 from September 2024. Investors who bought $1,000 worth of Conagra’s shares 5 years ago would now be looking at an investment worth $530.64.
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