Conagra Brands: A High Yield With A $7 Billion Catch

Conagra Brands (CAG) is rated Hold with a $10 target due to high leverage, margin pressure, and dividend sustainability concerns. Organic sales turned positive in Q3 after declining since FY23, but margins are shrinking as Conagra absorbs inflation to win back volume lost to private labels. Dividend at risk: The 10% yield is barely covered by free cash flow, and a cut of around 20% under the new CEO would not be surprising.