CHICAGO Credit Suisse First Boston said its downgrade of food conglomerate ConAgra Inc. to hold from buy was based on valuation.
- Analyst David Nelson said in a report that since he upgraded the stock to buy on August 25, the stock has risen past his initial price target of 30 and reached his revised target of 32.
- He said that the stock is trading at a moderate discount on several measures to the packaged food group, which he said was probably appropriate given the inherent volatility in ConAgra's business mix.
- Nelson said macroeconomic conditions remain favorable, with cattle feeding, beef packing, pork packing and chicken margins in the second half of the year still expected to improve from year-earlier levels.
- He said his $1.52 per share estimate for fiscal 1999 earnings was the highest forecast on Wall Street and compares with a consensus of $1.47. His estimate may prove to be low, he added.
- ConAgra shares were down 9/16 at 31-5/8 in morning activity on the New York Stock Exchange.
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