02:25 PM EDT, 04/01/2024 (MT Newswires) -- Conagra Brands ( CAG ) looks set to report in-line fiscal third-quarter results on April 4 with sequential volume progress reflecting increased promotions, potentially leading the foodservice company to reiterate its full-year guidance, RBC Capital Markets said.

The brokerage said in a Monday note it is modeling for third-quarter revenue of $3 billion at Congara, narrowly below the $3.03 billion that analysts on average are forecasting in a Capital IQ survey. RBC's adjusted earnings per share target of $0.65 is in line with consensus.

"We expect the quarter to be ok, but don't see material upside," a group of analysts, including Nik Modi, wrote in a note reiterating a sector perform rating and $29 price target on the stock.

The results will likely point to pressure in domestic retail that would be partially offset by growth in its foodservice and international segments, Modi said. Checks also point to ongoing softness in the frozen category, which posted year-over-year sales declines of 10.5% and 3.3% in the first and second quarters, according to the report.

Conagra is expected to reiterate its fiscal 2024 guidance after doing so at a conference held one week before the fiscal third quarter was set to close, according to RBC's analysis.

"We would not be surprised for this Conagra Brands ( CAG ) print to look like other recent food prints (modest beat with reiteration of guide), which displays progress but doesn't materially change the thesis when looking at the next 12 months," Modi wrote.

Further out, RBC Capital Markets would "need to see further volume improvements in snacks and frozen to have greater conviction there is upside" to current fiscal 2025 Wall Street estimates.

"An element of prudence would be appropriate in guidance given there is still some uncertainty about the macro environment," Modi said. "Conagra Brands ( CAG ) is working towards improvements, but we still don't see a ton of flexibility."

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