Conagra Brands – Risk Profile
- As per GlobalData's proprietary risk methodology, Conagra's overall risk score is 3.15, signifying medium risk
- Country and operational risk pillars have boosted the overall risk profile of the company
- A high proportion of debt on its balance sheet and lower current ratio negatively impacted the financial risk scores
Conagra Brands Inc (Conagra) has a good risk profile and is one of the leading companies based on our proprietary risk assessment of the food sector in the consumer industry. The company's operational risk score is better than the sector's average due to its strong manufacturing capabilities. However, low cash flow is a cause for concern, affecting the financial risk scores.
About the Company
Conagra manufactures and distributes branded and value-added consumer food and foodservice items and ingredients. The company's product portfolio includes shelf-stable food products, meals, entrees, frozen foods, sauces, and custom-manufactured culinary products. Its major brands include Marie Callender's, Duncan Hines, Birds Eye, Reddi-Wip, Vlasic, Banquet, Healthy Choice, Slim Jim, Angie's BOOMCHICKAPOP, Gardein, Duke's, Udis, Earth Balance, and Frontera.
Conagra is one of the leaders in the food industry, with reported revenue of $11 billion in 2021, an annual growth of 1.19%. Net income grew 54.64% in 2021 compared to 2020.
Risk Pillars
Our proprietary risk assessment uses a combination of four risk pillars – Country, Industry, Operational, and Financial. Scores are based on a scale of 1 to 5, 1 being the lowest risk and 5 being the highest.
Conagra has an average risk profile in the food sector, while companies like Dali Foods Group Co Ltd, Calbee Inc, and Foshan Haitian Flavoring Food Co., Ltd. lead the sector. The company's country and operational risk pillars fare better than the other risk pillars.
Country Risk: The company has a country risk score of 4.83, with most of the revenue derived from the US (91.43%). However, the dependence on a single country could affect the company's operational and financial performance by exposing it to the economic and geopolitical risks associated with the country.
Industry Risk: The company's primary exposure is to the food sector, with 92% of revenue generated from the food sector. Lower profit margins and weak growth projections characterize the food sector, which has resulted in an average industry risk score of 3.
Operational Risk: Our operational risk score is based on four pillars – business positioning, scale, operational efficiency, and profitability. Conagra's large scale of operation with more than 57 brands enhances its portfolio of offerings. The company's strong competitive positioning had a positive effect on operational scores. However, a lower degree of operating leverage is a cause for concern.
Financial Risk: Low current ratio impacted the liquidity position of the company. It indicates decreasing ease in funding the company's day-to-day operations, limiting its ability to capture growth opportunities in the market. High debt has further impacted the overall financial score.
About our Methodology:
GlobalData risk scorecard for a sector provides the analysis of various risks a company is vulnerable to. Our risk framework comprises four pillars – country, industry, operational and financial. The country risk for an entity signifies the risk of operating in a particular country. GlobalData's proprietary country risk assessment framework is used to calculate the risk for individual countries. Industry risk is an integral part of risk analysis, and it implies the riskiness and stability of the industries in which a company operates. The operational and financial risk profile comprises a company's risk and return potential based on its key operational and financial metrics. Our scores are based on an average of the latest three fiscal year data.
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