UPDATE: UBS Starts ConAgra (CAG) at Neutral
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(Updated - November 14, 2016 8:36 AM EST)
UBS initiated coverage on ConAgra (NYSE: CAG) with a Neutral rating and a price target of $36.
Analyst Steven Strycula said, "In the last 2 years ConAgra has transformed its portfolio under new leadership through asset divestitures, strategy shifts, and cultural change (moving HQ to Chicago from Omaha). Following the Nov 9th spin-off of Lamb Weston to shareholders, ConAgra is a leaner and less leveraged food manufacturer with ~1.5x net debt/EBITDA. From here ConAgra will take action to reshape its portfolio through synergy focused M&A and divesting underperforming brands using its $1.4b NOL asset. Operationally, ConAgra has significant heavy lifting ahead of it as the company rebases revenues to a more profitable core in FY17, reinvigorates investment-starved brands, cuts SG&A spend by $200m, and streamlines supply chain operations. Given the complexity and limited visibility into ConAgra's turnaround we prefer a more attractive risk/reward."
Shares of ConAgra closed at $34.93 yesterday.
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