Industrial Bank: Three major food retailers in the United States face profit risks, all downgraded to "reduce" rating.

Wells Fargo & Company believes that the three largest food producers in the United States are facing fundamental risks by 2026 and warns that potential negative factors could harm their profits. Therefore, analyst Chris Carey has downgraded his ratings of Conagra (CAG.US), General Mills, Inc. (GIS.US), and Campbell Soup Company (CPB.US) from "hold" to "sell". "Despite good valuation and market sentiment, the combination of risks such as earnings per share, high leverage, and dividend tightening could lead to underperformance compared to peers," Carey stated in a report to clients, also adding that soft consumer trends, inflation risks, and rising sales, general, and administrative expenses are unfavorable for these stocks. The dividend yield of Conagra, Campbell, and General Mills, Inc. ranges from 5.5% to over 7%, making them some of the highest dividend-yielding companies in the consumer staples industry. However, Carey warned that given the current dividend payout ratio, there is a risk in capital allocation before further dividend cuts. In the latest quarterly performance report released by Campbell Soup Company, sales growth expectations were revised from moderate growth to -1% to -2%. CEO Mick Beekhuizen stated that the company is accelerating cost savings plans to counter the adverse impacts of rising costs and is taking a more cautious approach to performance for the remainder of the year. Carey pointed out that soft second-quarter performance and worse-than-expected performance guidance led to weak performance for Campbell and its peers. "We may be entering another fiscal year with higher earnings per share risks, high leverage, low valuation but still close to the lowest point in the past 20 years, making it unlikely to be a major catalyst for stock price growth," Carey concluded.