The firm maintained its "buy" rating on the packaged foods company, citing its asset sale valuation framework and stand-alone LW model, among other factors.
ConAgra has also moved on from old management who failed to tailor its portfolio to fit a faster growth profile, Jefferies continued.
"Now a new highly motivated mgmt team, who we like, is aggressively implementing a strategic plan that has the potential to unlock ~$14B in incremental value by spinning off undervalued growth assets (Lamb Weston), selling brands with a low tax basis using the $4B tax loss carry-forward from failed Ralcorp deal to efficiently return cash to shareholders, and significantly improving profitability of the remaining business...," Jefferies said in an analyst note.
Additionally, ConAgra could add value through asset sales, Jefferies noted.
Shares of ConAgra are sliding 0.48% to $46.17 in late afternoon trading today.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate CONAGRA FOODS INC as a Hold with a ratings score of C+. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and weak operating cash flow.
You can view the full analysis from the report here: CAG