conagra brand (CAG) and Ram Weston (LW) reported strong second-quarter results early on Thursday. CAG shares and his LW shares surged, with both packaged food stocks approaching buy points after big gains.
Conagra and Lamb Weston benefit from strong pricing and product mix. However, rising costs and supply chain issues are highlighted. Conagra flagged the lingering issue last October.
Amid rising recession fears, packaged food inventories could provide a haven from recession. Consumers generally continue to purchase staples even though they cut back on more discretionary items.
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Estimate: Analysts surveyed by FactSet expect Conagra’s earnings to recover 3.5% year-over-year to 66 cents per share. Earnings he increased 7.1% to $3.277 billion. That would mark the second straight quarter of slowing earnings growth.
result: Conagra reports earnings increased 26.6% to 81 cents per share. Revenue increased 8.3% to $3.31 billion.
Outlook: Analysts forecast third-quarter EPS of 60 cents, up 2.7%. They forecast Conagra’s annual profit to rise 4.5% to his $2.47.
Conagra shares rose 3.2% in pre-market trading. Shares on Wednesday closed 0.5% lower at 38.65. According to MarketSmith chart analysis, CAG stock shows an irregular pattern of buy points at 37.07 and alternate entries at 36.94. The stock is well above its 50-day moving average and above its 200-day moving average after his strongest rally since November.
Please keep in mind that the market is in a correction and buying new shares is a very risky prospect.
The line of relative strength for CAG stocks is near its highs.
A relative strength rating of 91 means that Conagra’s stock has outperformed 91% of all stocks in the IBD’s database over the past year.
The Chicago-based company owns popular frozen food brands such as Birds Eye, Marie Callender’s and Healthy Choice.
Lam Weston Earnings
Estimate: Analysts polled by Zachs expect earnings per share for Lam Weston to be 74 cents, up 48% year over year. Earnings increased him 15.2% to $1.16 billion.
result: Lamb Weston’s earnings climbed 156% to $1.28 per share. Sales reached $1.28 billion, not 27%.
Outlook: Analysts expect second-quarter EPS to rise 1.4% to 74 cents. Full-year EPS is expected to increase 45.7% to $3.03.
Lam Weston shares rose 0.3% to 87.48 on Wednesday, just above the 50-day line. LW stock broke below the 88.14 flat base buy point without triggering a sell signal. Shares rose 8.5% in pre-market trading on Thursday.
A relative strength rating of 95 means that Lam Weston’s stock has outperformed 95% of all stocks in the IBD’s database over the past year.
The Eagle, Idaho-based company is a leading supplier of frozen potato, appetizer and vegetable products to restaurants and retailers.
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