NEW YORK (AP) — Two analysts raised their forecasts for ConAgra Foods Inc. on Friday, citing the company's strong fiscal first-quarter performance and easing commodity costs.
THE OPINION: ConAgra, which makes Banquet, Chef Boyardee and other brands, said Thursday that its profit more than doubled in the period as it benefited from acquisitions and better commodity costs. One-time investment gains also boosted results.
For the year, ConAgra said it now expects adjusted earnings of $2.03 to $2.06 per share, up from its previous forecast of $1.95 to $1.99 per share.
Citi analyst Dave Driscoll noted that commodity inflation for the period came in at 3 percent, below the 4 to 6 percent the company previously forecast for the year. That resulted in improved margins for the first time in two years, Driscoll noted.
Key Banc analyst Akshay Jagdale noted that the company, based in Omaha, Neb., is stepping up marketing efforts. For the quarter its spending on marketing rose by 24 percent. He also noted that the acquisitions of Bertolli and P.F. Chang's Home Menu frozen meals businesses toward the end of the quarter would further boost results in the year ahead.
Jagdale affirmed his "Buy" rating on the company's shares and raised his price target by a dollar to $31. He now expects earnings of $2.06 per share, up from $1.99.
Driscoll kept his "Buy" rating as well and raised his earnings estimate to $2.04 per share from $1.97. And he lifted his price target by a dollar to $31.
THE STOCK: ConAgra shares rose 37 cents to $27.61 in morning trading.
