Conagra Brands' (CAG) fiscal 2026 guidance, despite being below consensus, is 'more realistic than conservative,' Morgan Stanley said in a note on Friday, citing ongoing cost pressures, weak organic sales, and macro headwinds including tariffs.

Morgan Stanley trimmed Conagra's fiscal 2026 earnings estimates, lowering its price target to $20 from $22, while reiterating its 'equal weight' rating.

The brokerage firm said there is longer-term upside through productivity, pricing, and supply chain investments despite the near-term challenges that will weigh on the company's performance.

It added that while visibility remains limited, valuation appears compressed relative to peers, and signs of improvement in the second half of fiscal 2026 could support margin recovery in fiscal 2027.