Conagra Brands Stock Faces Dual Headwinds

Shares of packaged food giant Conagra Brands are currently under pressure from two distinct fronts. Investor confidence is being tested by a significant lawsuit and a concerning divergence between the company's own financial outlook and the projections of Wall Street analysts.

A primary source of market unease stems from Conagra's financial guidance. For its 2026 fiscal year, the company projects adjusted earnings per share in a range of $1.70 to $1.85. This outlook stands in stark contrast to the average analyst estimate of $2.35 for the current year. Such a substantial discrepancy has fueled doubts about the firm's near-term operational performance. It is worth noting that Conagra managed to surpass expectations with its quarterly results released on October 1, 2025.

Institutional investor activity reflects this uncertainty, sending mixed signals. While major holders like Arrowstreet Capital and Schroder Investment Management significantly increased their stakes in recent periods, the Macquarie Value Fund completely exited its position during the third quarter.

Legal and Political Scrutiny Intensifies

Adding to the challenges, the City of San Francisco filed a lawsuit against Conagra Brands in early December. The legal action, which also targets other industry leaders including PepsiCo and Kraft Heinz, centers on allegations concerning so-called "ultra-processed foods." This suit raises broader ethical questions and places the entire sector under heightened regulatory scrutiny.

Should investors sell immediately? Or is it worth buying Conagra Brands?

The situation gained an additional layer of political attention following revelations in November. Just prior to the lawsuit's announcement, it became public that Senator Gary C. Peters had purchased Conagra stock valued at up to $15,000. Although a relatively modest investment, the timing has drawn further scrutiny to the company's circumstances.

All Eyes on the Upcoming Quarterly Report

The next critical milestone for Conagra is scheduled for December 19, 2025. On that date, the company will disclose its results for the second quarter of fiscal 2026. This earnings release and the subsequent conference call with analysts are anticipated to provide crucial clarity regarding the company's full-year forecast and its ability to navigate current pressures.

The prevailing analyst consensus currently rates the stock as "Reduce," with an average price target of $21.50. Following a pronounced decline over the past year, Conagra's share price is trading near its 52-week low.