Research Update: Conagra Brands Inc. 'BBB-' Issuer Credit Rating Affirmed; Outlook Stable; Debt Ratings Affirmed

U.S.-based Conagra Brands Inc.'s adjusted leverage is still high at about 5x, reflecting only 0.25x improvement since acquiring Pinnacle Foods a little over a year ago. After reporting several earnings misses since completing the Pinnacle acquisition, Conagra's most recent second quarter ended Nov. 24, 2019, was better than expected, with organic sales increasing 1.6%. We are affirming all of our ratings, including the 'BBB-' issuer credit rating, on the packaged food company and maintaining our stable outlook. Our base case forecast--which is largely unchanged--continues to incorporate our expectation that Conagra's innovation pipeline, which is hitting shelves now, will result in good organic sales and adjusted EBITDA growth in the upcoming third and fourth quarters of fiscal 2020. The stable outlook

...- U.S.-based Conagra Brands Inc.'s adjusted leverage is still high at about 5x, reflecting only 0.25x improvement since acquiring Pinnacle Foods a little over a year ago. - After reporting several earnings misses since completing the Pinnacle acquisition, Conagra's most recent second quarter ended Nov. 24, 2019, was better than expected, with organic sales increasing 1.6%. - We are affirming all of our ratings, including the '###-' issuer credit rating, on the packaged food company and maintaining our stable outlook. Our base case forecast--which is largely unchanged--continues to incorporate our expectation that Conagra's innovation pipeline, which is hitting shelves now, will result in good organic sales and adjusted EBITDA growth in the upcoming third and fourth quarters of fiscal 2020. - The stable outlook reflects our expectation that Conagra will generate profitable, innovation-driven organic sales growth in the upcoming third and fourth quarters of fiscal 2020 (ending May 31, 2020)....

Research Update