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Hormel Foods
(NYSE:HRL)
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Rating:65Neutral
Price Target:
$28.00
▲(10.63% Upside)
Action:Reiterated
Date:07/28/26
HRL scores in the mid-range primarily due to cooled financial performance (margin compression and lower returns) despite stable sales and solid cash generation. Technicals are supportive with the stock trading above key moving averages, while valuation is mixed—strong yield but a high P/E. The latest earnings call adds a constructive tilt via reaffirmed guidance and improving Q2 trends, offset by near-term Q3 cost and utilization headwinds.
Positive Factors
Consistent Organic Growth
Sustained organic growth across retail, foodservice and international shows durable demand and category relevance. Multiple segments gaining share reduces reliance on any single channel, supporting predictable revenue and easier capacity planning over the next several quarters.
Negative Factors
Margin Compression & Lower ROE
Material decline in margins and returns versus prior years indicates lasting pressure on profitability. Until pricing, mix improvements or cost reductions sustainably outpace commodity and logistics inflation, ROE and cash‑return capacity will remain constrained.
Read all positive and negative factors
Positive Factors
Negative Factors
Consistent Organic Growth
Sustained organic growth across retail, foodservice and international shows durable demand and category relevance. Multiple segments gaining share reduces reliance on any single channel, supporting predictable revenue and easier capacity planning over the next several quarters.
Read all positive factors
Hormel Foods Key Performance Indicators (KPIs)
Hormel Foods (HRL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.76B
Dividend Yield4.67%
Average Volume (3M)3.77M
Price to Earnings (P/E)29.4
Beta (1Y)0.03
Revenue Growth2.47%
EPS Growth-37.67%
CountryUS
Employees20,000
SectorConsumer Defensive
Sector Strength42
IndustryPackaged Foods
Share Statistics
EPS (TTM)0.85
Shares Outstanding550,314,940
10 Day Avg. Volume3,251,829
30 Day Avg. Volume3,765,014
Financial Highlights & Ratios
PEG Ratio-0.67
Price to Book (P/B)1.65
Price to Sales (P/S)1.08
P/FCF Ratio24.44
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$26.67Price Target Upside5.36% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)1.49
Revenue Forecast (FY)$12.29B
Hormel Foods Business Overview & Revenue Model
Company Description
Hormel Foods Corporation is a prominent global food company that specializes in the creation, preparation, and supply of a diverse array of meat, nut, and other culinary items. Its extensive clientele spans retail outlets, institutional food provi...
How the Company Makes Money
Hormel makes money primarily by selling branded packaged foods to customers across two main channels: (1) retail (e.g., grocery, mass, club, and other consumer outlets) and (2) foodservice (e.g., restaurants, distributors, and institutional buyers...
Hormel Foods Earnings Call Summary
Earnings Call Date:May 28, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 27, 2026
Earnings Call Sentiment Positive
The call presented multiple clear operational and financial positives: consistent organic growth across all segments, margin expansion, strong adjusted EPS growth (+14% to $0.40), robust cash generation, and strategic portfolio moves (divestiture and CTO hire). These positives were balanced against manageable near-term headwinds—primarily higher fuel/logistics costs, commodity volatility (pork/beef), and a planned inventory rebalancing expected to pressure Q3 results and keep third-quarter adjusted earnings roughly flat year-over-year. Because management reaffirmed full-year guidance and indicated momentum toward the upper half of the earnings range, and because the favorable drivers (pricing, mix, manufacturing improvements, JV strength) appear to materially outweigh the temporary challenges, the overall tone is constructive and confident.Positive Updates
Consistent Top-Line Growth
Organic net sales grew 3% year-over-year in Q2, marking the company's sixth consecutive quarter of organic growth and demonstrating continued top-line momentum across the portfolio.
Negative Updates
Near-Term Cost Headwinds and Q3 Cadence
Third quarter adjusted earnings are expected to be roughly in line with the prior year due to near-term cost pressures including higher commodity inputs, a full quarter of elevated fuel costs, and planned inventory rebalancing that will lower plant utilization and add short-term costs.
Read all updates
Q2-2026 Updates
Positive
Negative
Consistent Top-Line Growth
Organic net sales grew 3% year-over-year in Q2, marking the company's sixth consecutive quarter of organic growth and demonstrating continued top-line momentum across the portfolio.
Read all positive updates
Company Guidance
Hormel reaffirmed its fiscal 2026 outlook, reiterating full‑year net sales of roughly $12.2–$12.5 billion and full‑year adjusted EPS of $1.43–$1.51 (management says it’s trending toward the upper half of that range), while calling Q3 adjusted earnings “more in line” with the prior year due to near‑term cost pressures (commodity inputs, higher fuel/logistics) and targeted inventory rebalancing that will pressure plant utilization in Q3; segment sales assumptions remain unchanged (retail: flat to low‑single‑digit growth, foodservice: mid‑single‑digit growth, international: high‑single‑digit growth), and the company expects about a $50 million FY26 sales reduction from the whole‑bird turkey divestiture with minimal FY adjusted EPS impact; the guidance reflects Q2 performance (organic net sales +3% — sixth consecutive quarter of organic growth; Q2 adjusted EPS $0.40, +14% y/y; gross margin 17.4%, +70 bps; adjusted operating margin +80 bps) and balance‑sheet/cash metrics (Q2 operating cash flow $179M, capex $82M, dividends returned $161M, cash on hand $827M), while noting the effective tax rate is tracking toward the higher end of the range.Hormel Foods Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
63
Positive
Cash Flow
60
Neutral
| Breakdown | TTM | Oct 2025 | Oct 2024 | Oct 2023 | Oct 2022 | Oct 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 12.22B | 12.11B | 11.92B | 12.11B | 12.46B | 11.39B |
| Gross Profit | 1.92B | 1.89B | 2.02B | 2.00B | 2.16B | 1.93B |
| EBITDA | 1.00B | 1.01B | 1.37B | 1.34B | 1.58B | 1.38B |
| Net Income | 466.82M | 478.20M | 805.04M | 793.57M | 999.99M | 908.84M |
Balance Sheet | ||||||
| Total Assets | 13.34B | 13.39B | 13.43B | 13.45B | 13.31B | 12.70B |
| Cash, Cash Equivalents and Short-Term Investments | 859.86M | 703.59M | 766.62M | 753.20M | 998.26M | 634.69M |
| Total Debt | 2.86B | 2.86B | 2.86B | 3.31B | 3.30B | 3.32B |
| Total Liabilities | 5.38B | 5.48B | 5.43B | 5.71B | 5.77B | 5.72B |
| Stockholders Equity | 7.95B | 7.90B | 7.99B | 7.73B | 7.54B | 6.97B |
Cash Flow | ||||||
| Free Cash Flow | 692.94M | 534.35M | 1.01B | 777.64M | 857.28M | 771.73M |
| Operating Cash Flow | 1.01B | 845.25M | 1.27B | 1.05B | 1.13B | 1.00B |
| Investing Cash Flow | -205.70M | -293.62M | -236.91M | -689.54M | -258.04M | -3.63B |
| Financing Cash Flow | -651.75M | -618.97M | -1.03B | -600.06M | -486.68M | 1.52B |
Hormel Foods Technical Analysis
Neutral
25.31
Price Trends
24.59
Positive
22.79
Positive
22.84
Positive
Market Momentum
0.21
Positive
50.56
Neutral
18.17
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HRL, the sentiment is Neutral. The current price of 25.31 is above the 20-day moving average (MA) of 25.26, above the 50-day MA of 24.59, and above the 200-day MA of 22.84, indicating a neutral trend. The MACD of 0.21 indicates Positive momentum. The RSI at 50.56 is Neutral, neither overbought nor oversold. The STOCH value of 18.17 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HRL.
Hormel Foods Risk Analysis
Hormel Foods disclosed 21 risk factors in its most recent earnings report. Hormel Foods reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Hormel Foods Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $13.69B | 8.46 | 25.58% | 3.78% | 9.54% | 108.44% | |
69 Neutral | $6.51B | 11.90 | 14.85% | ― | 1.42% | -55.97% | |
65 Neutral | $13.76B | 29.42 | 5.86% | 4.61% | 2.47% | -37.67% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | $6.55B | 10.72 | 15.30% | 7.14% | -2.90% | 33.92% | |
62 Neutral | $12.75B | -91.74 | -2.44% | 3.72% | 3.72% | 88.76% | |
49 Neutral | $14.98B | 13.63 | 20.90% | 8.14% | ― | 70.95% |
* Consumer Defensive Sector Average
HRL
Hormel Foods
25.02
-2.14
-7.87%
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PPC
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JBS
JBS
14.23
1.14
8.70%
Hormel Foods Corporate Events
Executive/Board Changes
Hormel Foods Names John Ghingo New President and CEO
Positive
Jul 28, 2026
On July 27, 2026, Hormel Foods’ board appointed current president and director John F. Ghingo as president and chief executive officer, effective October 26, 2026, succeeding interim CEO Jeffrey M. Ettinger, whose interim term will end on Oc...
Business Operations and StrategyExecutive/Board Changes
Hormel Foods Relocates International VP to Lead Asia Expansion
Positive
Jun 12, 2026
On June 9, 2026, Hormel Foods Corporation entered into an international assignment agreement with Swen Neufeldt, its group vice president of international, to relocate him to its Singapore-based subsidiary while he continues in his current role. T...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.