Conagra Brands, Inc.CAGNYSE

Overview Intelligence Charts News Fundamentals Key Metrics Financials Growth Insiders

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $64.67 per share(market-calibrated)

+241.2%

Upside to Fair Value

Current

$18.96

Pure Model

$72.02

Fair Value

$64.67

Bull Case

$81.15

Bear Case

$65.35

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

0.50%

Calibrated Growth

1.80%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $72.02.

What's Driving This Ratingfor CAG

↓

CapEx normalizing toward maintenance

Historical CapEx is 3.63% of revenue (heavy investment phase). Model fades this to 3.00% by Year 10, freeing up ~$80M in annual FCF. This is the biggest driver of long-term cash flow improvement.

↑

Margin expansion modeled

Current EBIT margin is 12.58% — below the sector mature average of 16.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $1.9B (14.88% margin).

→

Moderate revenue growth

Analyst consensus projects -3.14% revenue growth, fading to 2.50% by Year 10. Revenue reaches $12.6B (vs $11.6B today).

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 200bps below the model's 2.50%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 78.82% indicates efficient cash generation. FCF reaches $1.8B by Year 10 (14.34% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)-0.06

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)4.23%

Cost of Debt

Pre-tax Cost of Debt5.13%

Tax Rate5.00%

After-tax Cost of Debt4.88%

Equity Weight (E/V)52.91%

Debt Weight (D/V)47.09%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (52.91% × 4.23%) + (47.09% × 4.88%)

= 5.50%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$11.2B	$11.3B	$11.6B	$11.8B	$12.6B
EBIT	$1.4B	$1.4B	$1.5B	$1.6B	$1.9B
Tax	$71M	$71M	$73M	$82M	$94M
NOPAT	$1.3B	$1.3B	$1.4B	$1.6B	$1.8B
+ Depreciation	$373M	$373M	$383M	$392M	$417M
- Capex	$409M	$393M	$388M	$380M	$377M
- Δ NWC	-$16M	$6M	$2M	$7M	$14M
Free Cash Flow	$1.3B	$1.3B	$1.4B	$1.6B	$1.8B
Discount Factor	0.948	0.852	0.765	0.687	0.585
Present Value	$1.3B	$1.1B	$1.1B	$1.1B	$1.1B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$1.8B

Terminal Growth Rate2.50%

WACC5.50%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$61.6B

PV of Terminal Value$36.1B

Exit Multiple Method

Year 10 EBITDA$2.3B

Exit Multiple (EV/EBITDA)20.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$45.8B

PV of Terminal Value$26.8B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$11.0B

PV of Terminal Value$36.1B

Enterprise Value$47.1B

(-) Net Debt$8.0B

Equity Value$39.1B

Shares Outstanding478M

Price per Share$81.72

Exit Multiple Method

PV of Projected FCFs$11.0B

PV of Terminal Value$26.8B

Enterprise Value$37.8B

(-) Net Debt$8.0B

Equity Value$29.8B

Shares Outstanding478M

Price per Share$62.31

Pure Model Fair Value

$72.02

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
3.50%	$110.57	$105.43	$100.54	$95.87	$91.42
4.50%	$79.40	$87.85	$100.54	$95.87	$91.42
5.50%	$62.31	$66.47	$72.02	$79.78	$91.42
6.50%	$51.05	$53.42	$56.39	$60.21	$65.31
7.50%	$42.81	$44.30	$46.09	$48.27	$51.00

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$65.35

244.7% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: -0.08

Base Case

$72.02

279.9% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: -0.06

Bull Case

$81.15

328.1% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 0.30

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Consumer Defensive Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth-3.14%

Year 3 Revenue Growth1.16%

Year 5 Revenue Growth0.48%

Year 7 Revenue Growth1.29%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin12.58%

Terminal EBIT Margin16.00%

Tax Rate5.00%

Historical Capex / Rev3.63%

Terminal Capex / Rev3.00%

NWC / Revenue4.47%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 20x EV/EBITDA (Consumer Defensive sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

Explore More

S&P 500 Screener

Filter and sort all 500 stocks

Market Movers

Today's biggest gainers and losers

Market Heatmap

Visual sector performance