Fitch upgrades Conagra to BBB

Fitch Ratings said it upgraded Conagra Brands, Inc.'s long-term issuer default rating to BBB and revised the outlook to stable from positive.

Fitch said the rating recognizes Conagra’s evolution to a business model that aligns with other large U.S. packaged food companies.

“Following a series of divestitures, Conagra has emerged as a pure play portfolio of branded products. Operating margins have increased from low double digits to mid double digits,” the agency said in a news release.

“The company is investing in product innovation and marketing. Results of this investment are reflected in the improved performance of brands such as Healthy Choice.

“Fitch believes Conagra could stabilize sales beginning in late fiscal 2018 after several years of declines and expects the company to maintain leverage under 3x.”

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