Conagra's stock rating from Hold to Buy with a price target boosted from $36 to $38 after hosting a meeting with senior members of the company's management team.

1. Valuation

Conagra's stock is trading at a 5 percent discount versus other large-cap packaged food companies, the analyst wrote. The discounted valuation may not be appropriate given the company's improving sales trends, strong earnings per share growth, optionality through acquisitions and divestitures, and an outlook for margin expansion beyond management's own targets of 2020.

2. Sales Growth

Conagra's acquisition of Angie's Artisan Foods coupled with improvements in underlying sales trends will result in a 0.8-percent underlying sales decline in fiscal 2018, the analyst wrote. But after that, the company will likely see a compounded annual sales growth profile of 1 percent to 2 percent through 2020 — a projection with which management is comfortable.

3. Operating And Profit Growth

Conagra's initiatives to boost margins has happened sooner than expected with a first-quarter fiscal 2018 gross margin of 16.5 percent, which matches the company's guidance for 2020. As such, an accelerated rate of margin improvements over the years will likely result in the company exceeding its 2020 guidance.

4. Balance Sheet

Conagra's balance sheet implies a 2x net debt/EBITDA ratio but is closer to 1x when including the Ardent Mills JV contribution. This happens to be a level that is supportive of an "aggressive" share buyback program along with new acquisitions over the next few years. Related Links: ConAgra CEO Explains Why He's Optimistic Over A Trump Presidency 5 Ways M&A Could Be The Best Play For Pinnacle Foods _______ Image Credit: Conagra Headquarters, before name change. Tyrone from Omaha, NE [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons