ConAgra Brands cut at Jefferies – volume performance ‘amongst most challenged in large-cap food’

Jefferies analysts downgraded shares of ConAgra Brands (NYSE:) to Hold from Buy, cutting the price target on the stock to $38 from $46 in a note Wednesday.

They told investors that the driver of the downgrade is the company’s relative volume performance.

CAG is set to report its fourth quarter results on July 13, and “US tracked channel data for the quarter shows sales decelerated to ~+4% with volumes down ~6.5%, while trends worsened in June (+0.3% sales / (~8%) volume),” wrote analysts.

They note that CAG’s volume performance is “now amongst the most challenged in large-cap food,” adding that while it owns one the most diverse portfolios, it “could limit brand support focus.”

“We fear margin expansion alone may not be enough to generate NT incremental investor appetite, as volumes remain in focus,” the analysts added.