Conagra Brands's Next Earnings Report on Sep. 30 2026 Could Send the Stock Soaring. Here's Why.

Key Points

• Analysts tracking the stock expect year-over-year declines in both revenue and profitability.
• So a convincing beat on either metric could easily give a meaningful lift to the shares.
• 10 stocks we like better than Conagra Brands ›

This coming Hump Day is going to be an important one for Conagra Brands (NYSE:CAG). That morning, it's scheduled to publish its first quarterly earnings report for the current fiscal year (2027), and expectations are modest. Even so, the food company has missed analyst estimates more than once in the recent past, and if that happens again, its already-beaten-down stock could take another body blow.

Let's take a look at the expectations for first-quarter performance and gauge Conagra's prospects for that period and beyond.

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Downward trajectories

The consensus analyst net sales estimate for Conagra's first quarter, i.e., the three-month stretch ending Aug. 31, is $2.59 billion. That's less than 2% below what the storied comestibles company earned in the same period of fiscal 2026.

Those pundits are modeling a far more dramatic drop in net income, as their collective estimate for the metric not under generally accepted accounting principles (non-GAAP, or adjusted) is $0.28 per share. Coincidentally, this is 28% below the year-ago result.

That downward dynamic isn't especially encouraging, however we should keep in mind that it's not unusual for Conagra to top expectations, if only modestly. In fact, it beat on adjusted earnings in three of the four reported fiscal 2026 quarters, with the only miss (for the third quarter figure) being a narrow one, at $0.39 per share versus the $0.40 per share analyst consensus.

Adjusting to the modern era

We can't ignore those low expectations, however, and we can't turn away from the continuing erosion of Conagra's key fundamentals. Zooming out some, annual net sales have fallen in every fiscal year since 2023. On top of that, the typically profitable company posted a fairly steep ($1.9 billion) GAAP net loss for 2026. Much of that was due to over $2.9 billion in non-cash impairment charges against legacy brands, plus goodwill.

However, while that means it's largely a paper loss, it still looms large in investors’ view. And even though the company posted an adjusted net profit, at $823 million it was well down from the previous year's more than $1.1 billion.

Earlier this year, management was compelled, for the sake of the finances, to cut the company's quarterly dividend. It chopped it in half, resulting in a quarterly payout of just under $0.18 per share. That was the first time since 2006 it reduced the dividend, by the way.

The downward trend in fundamentals is mainly due to the nature of Conagra's business. It's still holding on to its historical role as a purveyor of frozen and prepared foods. The Birds Eye line remains a supermarket freezer mainstay, as does Orville Redenbacher's popcorn in the snack aisle, and Slim Jim meat tubes in the checkout rack. We oldies who remember grocery shopping with Mom and Dad in decades past saw those same products in the same spots.

But the food business is always changing, because consumer tastes are constantly shifting. For years now, folks have become increasingly more health-conscious, and demand for healthy comestibles has increased precipitously. Witness the rise of organic products, for one; these goods basically only existed in health food stores in the old days. Remember those? Since then, they've gone wide and mainstream.

Meet the new boss

It can be hard for a veteran company to devise and execute a major strategic change, but at this point, that might just be what's needed for Conagra. In April, the company appointed a new CEO, John Brase. He's a long-serving food industry executive, so he's sure to have a good read on the current state of the industry. But it feels to me there's significant inertia at the company, and we haven't yet received any indication there will be a major change in its approach. If there are intimations of this in the upcoming earnings report, investors might be bullish enough to push the stock higher.

I'd say the same if Conagra manages a strong beat on either the top or bottom line. Or if it declares even a modest dividend raise. Would I bet on one of these two things to happen? At this point, no, but for the sake of both the company and its shareholders, it'd be nice if I'm wrong.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.