Why Conagra Stock Got Mashed in March

By Eric Volkman – Apr 5, 2026 at 5:52PM ESTKey PointsThat pundit now believes Conagra is the equivalent of a sell.The company might be out of sync with the times.A recommendation downgrade from an analyst at a prominent bank helped send Conagra (CAG +1.22%) stock down by more than 18% last month. Although this was part of a "package" downgrade of notable food industry stocks, it was small comfort to shareholders. The sour taste of a downgrade The downgrading party was one of the "big four" U.S. lenders, Wells Fargo. The bank's analyst Chris Carey downshifted his rating on Conagra, in addition to two other peer stocks, Campbell Soup and General Mills. He now feels all three rate an underweight (read: sell), where previously he flagged each as an equal weight (hold). Image source: Getty Images. According to reports, Carey believes that something like a perfect storm of factors will negatively impact these storied food companies. Consumption trends are sluggish, inflation remains a concern with consumers, and budgets for selling, general, and administrative budgets are rather tight these days. Specifically addressing Conagra, Carey wrote in his update that the company has rather high leverage, and it's paying out significantly for its high-yield dividend these days. That pressure on the finances might prove to be too intense. Later in the month, another analyst, Peter Grom from UBS, weighed in on Conagra. We can't say he's a bull, as he reiterated his neutral recommendation and $20 price target on the stock. He sounded an optimistic note about the company's fiscal third quarter of 2026 (the results of which were published on April 1), according to reports. However, Grom added that current conditions aren't ideal. This is due in no small part to the fact that legacy "foodies" are, to varying degrees, struggling to compete in the modern market. For decades, they did well serving comfort food items to consumers who valued regularity, predictability, and convenience. This dynamic was especially beneficial to Conagra, which specializes in packaged brands such as Birds Eye frozen vegetables, Hebrew National hot dogs and sausages, and Pam cooking oil spray. Yet today's consumers are more discerning and tend to favor fresher fare. ExpandNASDAQ: CPBCampbell'sToday's Change(0.11%) $0.03Current Price$22.02Key Data PointsMarket Cap$6.6BDay's Range$21.77 - $22.2052wk Range$20.62 - $40.44Volume233KAvg Vol8.6MGross Margin28.97%Dividend Yield8.86% The power of a high-yield dividend The dividend is, for many investors, Conagra's great draw. Management declared a new quarterly payout of $0.35 per share late in the month, exactly the same amount it has distributed in every quarter since late 2023. While that yields 8.9%, it also results in a sky-high payout ratio (i.e., the ratio of profitability to dividends). Conagra feels like a shaky stock to me. It seems like a company in need of a refresh to its brand portfolio, including a push into the higher-quality food items currently in vogue. That dividend also looks like it might be in for a cut. I'd avoid this company's shares for now.Read NextApr 2, 2026 •By Motley Fool TranscribingConagra (CAG) Q3 2026 Earnings Call TranscriptApr 1, 2026 •By Reuben Gregg BrewerIf You Like Conagra's Dividend But Not Its Business, You'll Love General Mills' Dividend and Its BusinessMar 15, 2026 •By Reuben Gregg BrewerConagra Brands Is Set to Invest $220 Million in a Manufacturing Plant But Its Stock is Down This Week. Is the Packaged Foods Company a Buy in 2026?Mar 14, 2026 •By Eric VolkmanShould You Buy the 3 Highest-Paying Dividend Stocks in the S&P 500?Mar 12, 2026 •By Catie HoganIs Conagra Stock a Long-Term Buy?Apr 5, 2026 •By Dave KovaleskiCelsius Holdings Has Dropped 25% This Year. Generational Opportunity or Falling Knife?About the AuthorEric Volkman is a contributing Motley Fool finance and stock market analyst. Previously, Eric was an equities analyst at European investment bank Raiffeisen Capital and Investment. He’s also been a freelance finance writer since 1995. He studied at Susquehanna University.TMFVolkmanStocks MentionedConagra BrandsNYSE: CAG$15.72(+1.29%)+$0.20Wells FargoNYSE: WFC$80.75(+0.22%)+$0.18General MillsNYSE: GIS$37.42(+0.56%)+$0.21Campbell'sNASDAQ: CPB$22.02(+0.11%)+$0.03UBSNYSE: UBS$39.45(-0.74%)-$0.30*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.