In a report published Wednesday, Bank of America Merrill Lynch analyst Bryan D. Spillane upgraded the rating on

(NYSE:

) from Underperform to Neutral, while raising the price target from $30 to $46. The analyst believes that the management's renewed focus on cost savings would drive margin improvement, while the possibility of additional strategic optional would drive upside to the stock in the near term. "Management unveiled its initial strategic "base plan", which includes divesting its private brands business, costs savings and productivity initiatives and driving growth in Consumer Foods and Lamb Weston," Spillane stated, while mentioning that the management appears to have left the door open for other potential strategic changes, including additional asset divestitures. According to the Bank of America report, ConAgra Foods' board and management intends to create shareholder value and to do so, are willing to adapt to whichever path offers better value creation opportunities. "This suggests to us that the new strategy still is evolving and there is potential for more change beyond just the private brands divestiture," the report said. Although ConAgra Foods has not yet shared any specific numbers, the management believes that there are significant opportunities to expand margins. The company also sees various key levers in SG&A, such as zero based budgeting, flattening the organization, establishing a culture of greater accountability and outsourcing back office operations. "In addition, management believes there are opportunities to improve supply chain efficiencies and to eliminate inefficient trade spending. The company will provide more details and initial F16 guidance when it hosts an investor meeting sometime in the fall," Spillane added.