With cost pressures easing, Conagra is expected to see bottom line growth in the next few quarters.
Kraft Heinz has a price-to-earnings ratio of 13x, compared to the industry average of 22x.
J.M. Smucker has a price-to-earnings ratio of 12x based on the last four quarters of earnings.
As the holiday season approaches, there are plenty of reasons to be grateful for, including family, friends, and good health. Undervalued stocks are another thing to appreciate during this time of year.
While many stocks are reaching new record highs, some valuations are still reasonable. With inflation subsiding and interest rates potentially decreasing, value stocks could have a strong year ahead. This is good news for the food and beverage industry, which has been overlooked in favor of high-flying sectors like AI and weight loss drugs.
Conagra Brands, Kraft Heinz Co., and J.M. Smucker Company are three food manufacturers that are currently undervalued. Let’s take a closer look at each of these companies.
Conagra Brands, Inc. (NYSE: CAG) is trading at around 12x trailing earnings and 10x next year’s earnings. Despite a 27% drop in share price this year, the company is expected to see improved profitability as cost pressures ease.
Kraft Heinz Co. (NASDAQ: KHC) is trading at 13x earnings, lower than the industry average of 22x. The company, which is known for its popular products like mac and cheese and Jell-O, has seen a 16% decline in share price this year. However, analysts expect modest profit growth next year, making it an attractive option for value investors.
The J.M. Smucker Company (NYSE: SJM) has a price-to-earnings ratio of 12x based on the last four quarters of earnings. The company recently completed a buyout of Hostess Brands, which is expected to impact future earnings. Despite a 30% drop in share price this year, the company is expected to see improved profitability in the coming years.
These undervalued food stocks present a compelling investment opportunity for value investors looking for potential returns in the coming years.
