US Consumer Staples "The Weekly Tab: More Questions Than Answers" Grom

Research evidence excerpt

US Consumer Staples "The Weekly Tab: More Questions Than Answers" Grom

Week: +1-212-713 1474

Conagra Brands (Neutral): CAG reported 4Q26 earnings this Wednesday (7/15) Antara Nag-Chaudhuri

before the open (link). The company delivered a low quality beat but much of the Associate Analyst

antara.nag-chaudhuri@ubs.com focus on the day centered on initial FY27 guidance, which came in below Street

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estimates on both EPS and organic sales growth as well as the 50% reduction in

the dividend. Shares were largely unchanged on the day and while we think Tristan How

investors applaud management’s willingness to address portfolio/investment Associate Analyst

tristan.how@ubs.com issues and view the guidance as achievable, we think some are still questioning if

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the changes will be enough to drive improved growth longer term.

General Mills (Sell): We hosted a call with the GIS management team earlier this

week (link). Overall, we thought the tone of the discussion was cautious on the

external environment yet optimistic on the actions the company is implementing

to improve the fundamental trajectory. While we left the meeting with greater

clarity on the path forward, many of the key variables remain outside

management’s control. As a result, it remains difficult to envision a meaningful

improvement in the near term, although we also do not currently see significant

downside risk to guidance. With shares once again screening as expensive relative

to other Center Store Food peers, we think the risk/reward skews to the downside

from here.

Constellation Brands (Buy): We hosted a call with members of the STZ IR team

earlier this week (link). Overall, we thought the tone of the discussion was similar