Conagra Brands heads into Q4 earnings season — the next print is July 9 — with short sellers accelerating, the Street in near-uniform retreat, and the stock trading at $13.14, a level last seen in the depths of the 2020 pandemic selloff.
Short interest has now reached 10.4% of free float, up from 9.7% noted in last week's note, and the pace of accumulation is quickening. Bears added roughly 3 million shares in a single session on June 9, pushing the weekly gain in short positions to 8.5%. The month-on-month build is 10.3%. As noted previously, borrowing costs remain negligible at 0.45% annualised — still easing, down 7% on the week — and availability is wide at 682% of short interest, meaning this is entirely demand-driven conviction. There is no squeeze pressure, no friction, nothing stopping new shorts from piling in. The difference from a week ago is that they are doing so at an accelerating rate.
Options traders remain the outlier. The put/call ratio has actually fallen to 0.47, close to its 52-week low and roughly 1.5 standard deviations below its 20-day average. That is the most call-heavy positioning of the past year. The contrast is sharp: short sellers are at a multi-year high in conviction, while options traders are among the least defensively positioned they have been all year. One of these reads is wrong, and earnings season will likely resolve it.
The analyst community is offering no comfort. The week's most telling move came from Evercore ISI, which on June 10 cut its price target from $18 to $13 — a 28% reduction — while holding its In-Line rating. That follows Morgan Stanley's cut to $13 from $15 on June 5 and JPMorgan's reduction to $14 from $17 the same day. Bernstein went further on June 3, downgrading to Underperform with a $12 target. The consensus mean price target now sits at $14.59, implying less than 11% upside from current levels — and that figure is almost certainly drifting lower in real time as more firms re-anchor to the stock's new trading range. The bear case centres on COGS inflation, low hedging coverage heading into FY27, and structural volume weakness. Bulls point to brand resilience and the potential for margin recovery, but few are actively making that case right now. The P/E of roughly 8x and EV/EBITDA near 8.6x are starting to reflect deep value territory, yet the Street is not yet treating them as a buying opportunity.
Insider buying from April is the one contrarian data point worth holding. The Chairman of the Board bought 25,000 shares at $14.34 on April 14, and a Director added 17,500 shares at roughly the same price. Combined net insider buying over the past 90 days amounts to just over $600,000. That activity happened at prices above where the stock trades today, which dulls the signal somewhat, but it is the only net-positive directional read in the dataset. Peers have had a better week: CPB rose 5.4%, SJM surged over 11%, and GIS added 2%. The divergence underscores that the weakness in CAG is increasingly company-specific rather than sector-wide.
The July 9 earnings print is now the focal point — with short interest at a multi-year high, analysts clustered at or below current prices, and options traders positioned for a bounce, the setup has rarely been this divided, and volume and price action around the print will determine which camp was better positioned.
See the live data behind this article on ORTEX.
Open CAG on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
