The U.S. Department of Health and Human Services, along with the Food and Drug Administration (FDA), has unveiled a comprehensive plan to transition away from petroleum-based synthetic dyes in the food industry. This initiative will affect major food manufacturers, including Kraft Heinz (KHC), as well as several other giants like PepsiCo, Campbell Soup, and General Mills.
The FDA's strategy includes establishing a national standard and timeline for food companies to switch from petrochemical dyes to natural colorants. As part of this move, the FDA is set to revoke the authorization for two synthetic dyes, Citrus Red No. 2 and Orange B, within the next few months. Moreover, the agency aims to eliminate six additional synthetic dyes—FD&C Green No. 3, FD&C Red No. 40, FD&C Yellow No. 5, FD&C Yellow No. 6, FD&C Blue No. 1, and FD&C Blue No. 2—from the food supply by the end of the next year.
In an effort to ensure a smooth transition, the FDA plans to authorize four new natural color additives in the coming weeks and expedite the evaluation and approval of others. The agency is also collaborating with the National Institutes of Health to conduct extensive research on the effects of food additives on children's health and development. Additionally, food producers have been urged to voluntarily remove FD&C Red No. 3 well ahead of the previously set 2027-2028 deadline.
This regulatory shift will necessitate significant changes for companies like Kraft Heinz, which are heavily invested in processed and packaged foods. As they adapt to these new standards, the industry may experience notable transformations in product formulations and ingredient sourcing.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 17 analysts, the average target price for Conagra Brands Inc (CAG, Financial) is $27.34 with a high estimate of $31.00 and a low estimate of $24.00. The average target implies an upside of 7.28% from the current price of $25.48. More detailed estimate data can be found on the Conagra Brands Inc (CAG) Forecast page.
Based on the consensus recommendation from 19 brokerage firms, Conagra Brands Inc's (CAG, Financial) average brokerage recommendation is currently 2.9, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Conagra Brands Inc (CAG, Financial) in one year is $30.42, suggesting a upside of 19.39% from the current price of $25.48. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Conagra Brands Inc (CAG) Summary page.
