According to a Wall Street Journal report, packaged food giant Conagra Brands might sell its Hebrew National hot dog brand to Brazilian meat processor JBS SA.
Per the report, the deal could be worth $700 million and might also include Conagra’s (CAG) Egg Beaters and Odom’s Tennessee Pride brands. The sale, if finalized, could help JBS expand its reach in the fast-growing grocery store meat space.
Notably, the move could be part of Conagra’s ongoing strategy to exit non-core businesses. The company is reshaping its product portfolio and focusing on the high-growth frozen food and snacks business. (See Conagra Brands stock analysis on TipRanks)
On Feb. 16, Jefferies analyst Robert Dickerson maintained a Buy rating and a price target of $40 (8.7% upside potential) on the stock. In a note to investors, the analyst said, “Cost inflation is ticking up but is likely offset by productivity, lower COVID-related costs, pricing potential, and mix benefits, and we believe reaching the higher-end of the FY’22 organic growth guide could be feasible if food-at-home does in fact remain elevated and pricing actions don’t lead to higher-than-expected volume elasticity.”
Overall, consensus among analysts is a Hold based on 3 Holds, 1 Buy and 1 Sell. The average analyst price target of $35.80 implies downside potential of about 2.7% to current levels. Shares have gained 37.5% in the last year.
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