• If you are wondering whether Conagra Brands at around US$14 still reflects the underlying business, the current share price alone does not tell the full story.
• The stock has seen a 1.9% decline over the last week, a 10.9% decline over the last month, and is down 19.1% year to date and 34.9% over the last year, which will naturally raise questions about how the market is assessing its risks and potential.
• These weaker recent returns sit against a longer backdrop, with the stock down 55.6% over three years and 52.4% over five years, which may suggest some investors are wary. At the same time, those moves can also prompt closer attention from value focused investors who want to understand whether sentiment has moved further than fundamentals.
• On Simply Wall St's valuation checks, Conagra Brands scores 5 out of 6 for being undervalued, giving it a value score of 5. The rest of this article will walk through the different valuation methods behind that number, before finishing with a broader way to think about valuation beyond any single model.

Approach 1: Conagra Brands Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a stock could be worth by projecting the company’s future cash flows and discounting them back to today’s value using a required rate of return.

For Conagra Brands, the model uses last twelve months Free Cash Flow of about $862.9 million as a starting point. Analyst estimates then project Free Cash Flow figures such as $787.8 million in 2026, $723.1 million in 2027 and $975.3 million in 2028, all in $. Beyond the analyst window, Simply Wall St extends these projections out to 2035 using its own growth assumptions and discounts each year back to today.

Bringing these discounted cash flows together, the DCF model arrives at an estimated intrinsic value of about $51 per share. Compared with the current share price around $14, this implies the stock is 72.5% undervalued under this set of assumptions.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Conagra Brands is undervalued by 72.5%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.

Approach 2: Conagra Brands Price vs Sales

For companies where earnings can be influenced by accounting items or one off factors, the P/S ratio is a useful way to compare what investors are paying for each dollar of revenue. It is often interpreted alongside expectations for future growth and the perceived risk of those cash flows, since higher growth or lower risk can justify a higher multiple.

Conagra Brands currently trades on a P/S ratio of 0.60x. This sits close to both the peer average of 0.62x and the Food industry average of 0.72x, suggesting the stock is priced in line with many comparable companies on sales. Simply Wall St also calculates a proprietary “Fair Ratio” of 0.76x for Conagra Brands, which is the P/S multiple that would typically be expected given its earnings profile, industry, profit margins, market value and risk characteristics.

This Fair Ratio is designed to be more tailored than a simple comparison with peers, because it incorporates company specific factors such as growth, risks and profitability as well as its industry and size. Compared with the actual P/S of 0.60x, the Fair Ratio of 0.76x points to the stock trading below that modelled level.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Conagra Brands Narrative

Earlier it was mentioned that there is an even better way to understand valuation, so Narratives bring that to life by letting you attach a clear story about Conagra Brands to specific numbers such as your fair value, revenue, earnings and margin assumptions, then see how that story translates into a valuation you can compare with the current share price.

On Simply Wall St’s Community page, Narratives are quick to use, link the company story to a forecast and then to a fair value, and update automatically as new information such as earnings, guidance changes or news is added.

For example, one Conagra Brands Narrative on the optimistic end assumes a fair value of about US$20.52 with earnings around US$1.4b and a P/E of 9.0x in 2029, while a more cautious Narrative anchors on a fair value of about US$14.00 with earnings around US$1.1b and a P/E of 7.5x. By seeing how each fair value compares with today’s price you can decide which story you find more reasonable and how that might influence your own buy or sell decisions.

Do you think there's more to the story for Conagra Brands? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.