Hormel Foods (HRL) AI Stock Analysis

• Market Cap: $14.08B
• Dividend Yield: 4.82%
• Average Volume (3M): 4.66M
• Price to Earnings (P/E): 28.8
• Beta (1Y): 0.15
• Revenue Growth: 1.55%
• EPS Growth: -40.81%
• Country: US
• Employees: 20,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 0.34
• Shares Outstanding: 550,107,300
• 10 Day Avg. Volume: 5,365,267
• 30 Day Avg. Volume: 4,662,941
• PEG Ratio: -0.67
• Price to Book (P/B): 1.65
• Price to Sales (P/S): 1.08
• P/FCF Ratio: 24.44
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: 1.09
• Enterprise Value/Gross Profit: 7.01
• Enterprise Value/Ebitda: 12.92
• 1Y Price Target: $27.60
• Price Target Upside: 7.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 1.47
• Revenue Forecast (FY): $12.32B

• Rating: 68 Neutral
• Price Target: $27.00 ▲(5.47% Upside)
• Action: Downgraded Date: 02/27/26
• Date: Action: Downgraded 02/27/26

HRL scores as a steady but not high-conviction setup: solid balance sheet and positive free cash flow are the key supports, while profitability/margin compression remains the biggest fundamental constraint. Technically, momentum has improved (price above key moving averages, positive MACD), but valuation looks demanding at a ~29.7 P/E even with a strong ~4.6% yield. Management’s reaffirmed FY26 guidance helps, but near-term freight and commodity pressures keep the outlook cautious.

Positive Factors

Balance Sheet Resilience

Manageable leverage and stable equity give Hormel durable financial flexibility. A conservative balance sheet supports continued dividend payments, funds restructuring and capex guidance, enables opportunistic M&A or buybacks, and reduces refinancing risk across commodity cycles.

Consistent Free Cash Flow

Sustained positive FCF underpins the firm's capital allocation: funding capex, paying a long-lived dividend, and executing restructuring without heavy new debt. Reliable cash generation enhances resilience to cyclical commodity and freight shocks and supports strategic reinvestment.

Diversified, Growing Channels

Repeatable growth in Foodservice and International reduces dependence on U.S. retail. These channels often carry better pricing power and profit expansion potential, provide geographic diversification, and help offset retail softness, supporting more stable top-line and margin recovery over months.

Negative Factors

Margin Compression and Weaker Profitability

Material margin deterioration and lower net margin signal weakening earnings power versus prior years. Sustained margin pressure reduces internal funding capacity, lowers returns on capital, and raises execution demands for pricing, cost savings, or portfolio shifts to restore long-term profitability.

Persistent Commodity and Freight Headwinds

Elevated input costs and logistics create a structural margin risk: protein and nut inflation plus higher freight can persist for quarters, limiting the firm's ability to fully pass costs to consumers and compressing gross margins until restructuring and commodity relief materialize.

Retail Volume Softness and SKU Exits

Retail weakness, driven by SKU exits and pricing elasticity, threatens a key revenue base. Continued retail volume declines impair scale economics and brand shelf presence, making sustained top-line recovery and margin improvement more difficult absent regained retail traction or offsetting channel growth.

Hormel Foods Business Overview & Revenue Model

Company Description

Hormel Foods Corporation develops, processes, and distributes various meat, nuts, and food products to retail, foodservice, deli, and commercial customers in the United States and internationally. The company operates through four segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other. It provides various perishable products that include fresh meats, frozen items, refrigerated meal solutions, sausages, hams, guacamoles, and bacons; and shelf-stable products comprising canned luncheon meats, nut butters, snack nuts, chilies, shelf-stable microwaveable meals, hashes, stews, tortillas, salsas, tortilla chips, and others. The company also engages in the processing, marketing, and sale of branded and unbranded pork, beef, poultry, and turkey products, as well as offers nutritional food products and supplements, desserts and drink mixes, and industrial gelatin products. It sells its products primarily under the SKIPPY, SPAM, Hormel, Natural Choice, Applegate, Justin's, Jennie-O, Café H, Herdez, Black Label, Sadler's, Columbus, Gatherings, Herdez, Wholly, Columbus, Planters, NUT-rition, Planters Cheez Balls, Corn Nuts, etc. brand names through sales personnel, independent brokers, and distributors. The company was formerly known as Geo. A. Hormel & Company and changed its name to Hormel Foods Corporation in January 1995. Hormel Foods Corporation was founded in 1891 and is headquartered in Austin, Minnesota.

How the Company Makes Money

Hormel Foods generates revenue through multiple streams, primarily by selling branded and private label processed meats, turkey products, and other food items. The Refrigerated Foods segment, which includes products like deli meats and bacon, accounts for a significant portion of the company's sales. The Grocery Products segment, featuring items such as chili and peanut butter, also contributes considerably to revenue. Hormel further capitalizes on the growing demand for protein alternatives and health-oriented products, which is evidenced by its investment in plant-based food options. Additionally, the company benefits from strategic partnerships with retailers and foodservice providers, enabling widespread distribution of its products. Seasonal promotions, brand loyalty, and consumer trends toward convenience foods also play a crucial role in driving Hormel's earnings.

Hormel Foods Financial Statement Overview

Summary

Financials look stable but not strong: revenue has held up with recent TTM improvement, the balance sheet is resilient with manageable leverage, and free cash flow remains consistently positive. The main drag is weaker earnings power, with meaningful margin and ROE compression versus 2021–2022 and softer cash conversion/coverage recently.

Income Statement

Revenue has been fairly steady over the period, with a modest uptick in the latest Annual year and a much higher growth rate in TTM (Trailing-Twelve-Months). The bigger issue is profitability: gross and operating margins have compressed meaningfully versus 2021–2022 levels, and net margin has declined to ~4% in the most recent Annual year and remains around that level in TTM (Trailing-Twelve-Months). Overall, the top line is holding up, but earnings power has weakened compared with prior years.

Balance Sheet

Leverage looks manageable in the Annual reports, with debt-to-equity generally in the mid-0.3x to mid-0.4x range. Equity and total assets are relatively stable, supporting balance-sheet resilience. Return on equity has moderated from the low-teens earlier in the period to around ~6% recently, indicating lower profitability on the capital base even though the balance sheet itself remains solid.

Cash Flow

Cash generation is positive and generally supportive, with free cash flow consistently positive and improving in the latest Annual year (after a decline the year prior). That said, cash conversion has weakened recently: operating cash flow covers a smaller share of reported earnings in the last two periods, and free cash flow is a lower proportion of net income in the most recent Annual year and TTM (Trailing-Twelve-Months) versus earlier years. Overall cash flow remains a strength, but quality/coverage has softened.

Breakdown	TTM	Oct 2025	Oct 2024	Oct 2023	Oct 2022	Oct 2021
Income Statement
Total Revenue	12.14B	12.11B	11.92B	12.11B	12.46B	11.39B
Gross Profit	1.89B	1.89B	2.02B	2.00B	2.16B	1.93B
EBITDA	1.02B	1.01B	1.37B	1.34B	1.58B	1.38B
Net Income	489.42M	478.20M	805.04M	793.57M	999.99M	908.84M
Balance Sheet
Total Assets	13.32B	13.39B	13.43B	13.45B	13.31B	12.70B
Cash, Cash Equivalents and Short-Term Investments	901.21M	703.59M	766.62M	753.20M	998.26M	634.69M
Total Debt	0.00	2.86B	2.86B	3.31B	3.30B	3.32B
Total Liabilities	1.94B	5.48B	5.43B	5.71B	5.77B	5.72B
Stockholders Equity	11.38B	7.90B	7.99B	7.73B	7.54B	6.97B
Cash Flow
Free Cash Flow	577.53M	534.35M	1.01B	777.64M	857.28M	771.73M
Operating Cash Flow	885.26M	845.25M	1.27B	1.05B	1.13B	1.00B
Investing Cash Flow	-225.34M	-293.62M	-236.91M	-689.54M	-258.04M	-3.63B
Financing Cash Flow	-638.34M	-618.97M	-1.03B	-600.06M	-486.68M	1.52B

Hormel Foods Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 25.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HRL, the sentiment is Positive. The current price of 25.6 is above the 20-day moving average (MA) of 24.65, above the 50-day MA of 24.13, and above the 200-day MA of 25.56, indicating a bullish trend. The MACD of 0.31 indicates Negative momentum. The RSI at 59.61 is Neutral, neither overbought nor oversold. The STOCH value of 72.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HRL.

Hormel Foods Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PPC	74 Outperform	$10.25B	9.51	27.33%	―	1.81%	24.67%
HRL	68 Neutral	$14.08B	28.81	6.12%	4.82%	1.55%	-40.81%
JBS	66 Neutral	$18.05B	11.11	24.20%	9.72%	―	119.48%
MKC	65 Neutral	$19.07B	24.24	14.32%	2.61%	1.64%	-1.83%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
SJM	61 Neutral	$12.37B	―	-20.68%	4.45%	-0.66%	-326.55%
CPB	60 Neutral	$8.03B	13.94	14.82%	5.64%	2.71%	4.90%

Hormel Foods Corporate Events

Hormel Shareholders Approve 2026 Equity and Severance Plans

At its January 27, 2026 annual meeting, Hormel Foods Corporation received shareholder approval for a new 2026 Equity and Incentive Compensation Plan, replacing its 2018 plan and authorizing 21,951,785 shares for a broad array of equity and cash-based awards aimed at attracting, retaining and incentivizing employees, officers, consultants and non-employee directors. The company also adopted an Executive Severance Plan, effective January 31, 2026, that provides designated officers with structured severance, COBRA-related payments, pro-rated bonuses and accelerated vesting of restricted stock units in cases of qualifying involuntary terminations, while excluding executives already covered by comparable individual agreements; at the same meeting, shareholders re-elected all 12 directors, ratified Ernst & Young as auditor for fiscal 2026, and gave strong advisory support to executive pay, signaling broad investor backing for Hormel’s governance, compensation framework and leadership continuity.

The most recent analyst rating on (HRL) stock is a Buy with a $30.00 price target. To see the full list of analyst forecasts on Hormel Foods stock, see the HRL Stock Forecast page.