CAG
Conagra Brands, Inc.
$13.56
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 67.4% below fair value
You pay
$13.56
Bear
$34.21
Fair
$41.55
Bull
$48.88
Bear
$34.21
+152.3%
$2.91 × 14x P/E
Fair
$41.55
+206.4%
$2.91 × 17x P/E
Bull
$48.88
+260.5%
$2.91 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
4.7x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $17.55 from 25 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $41.55 per share.
Warnings
Dividend-based valuation: $24.98 (below our primary estimate by 50%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $17.55 (from 25 analysts). Our estimate is 182% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples