Hormel Foods (HRL) AI Stock Analysis

• Market Cap: $16.58B
• Dividend Yield: 3.85%
• Average Volume (3M): 2.93M
• Price to Earnings (P/E): 22.2
• Beta (1Y): 0.15
• Revenue Growth: -1.01%
• EPS Growth: -2.93%
• Country: US
• Employees: 20,000
• Sector: Consumer Defensive
• Sector Strength: 63
• Industry: Packaged Foods
• EPS (TTM): 0.35
• Shares Outstanding: 549,894,600
• 10 Day Avg. Volume: 2,342,858
• 30 Day Avg. Volume: 2,927,124
• PEG Ratio: -5.28
• Price to Book (P/B): 3.65
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 32.47
• Enterprise Value/Market Cap: 1.28
• Enterprise Value/Revenue: 0.44
• Enterprise Value/Gross Profit: 10.78
• Enterprise Value/Ebitda: 4.01
• 1Y Price Target: $33.00
• Price Target Upside: 8.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 71 Outperform
• Price Target: $34.00 ▲(11.81%Upside)

Hormel Foods' high overall score is supported by its strong financial stability and positive technical momentum, despite a relatively high valuation. The company's strategic initiatives and growth projections contribute positively, balancing out challenges from declining net income and macroeconomic pressures.

Positive Factors

Cost Savings and Profitability

HRL fits these parameters given: improved Jennie-O Turkey (JOTS) fundamentals, core Pork base business that is growing profits and FY25 cost savings program – 'Transformation & Modernization' (T&M), that HRL should be able to drop to bottom line.

Gross Margin

Fourth quarter’s exit rate on gross margin is expected to be strong as a result of benefits from better turkey markets, which should positively trend.

Operating Profit

Operating profit is up year-over-year for all segments.

Negative Factors

EPS Guidance

The stock’s lackluster response was driven by a lowered midpoint of EPS guidance and a significant ramp in operating profit needed to hit the revised outlook.

Profit Declines

All three segments should post YoY profit declines driven by tough snack nuts comparisons, higher raw material/input costs, and softness in Brazil.

Supply Chain Disruption

Continued pressures in the Turkey supply chain and a slower-than-anticipated Planters recovery weighed on HRL’s 1Q results and have spilled over into 2Q.

Hormel Foods Business Overview & Revenue Model

Company Description

Hormel Foods Corporation (HRL) is a global branded food company with a diverse portfolio of products that includes meat and food products. Headquartered in Austin, Minnesota, Hormel operates in several sectors, including retail, foodservice, and international markets. The company's core products range from ready-to-eat meals, refrigerated foods, and grocery products to protein-based items under well-known brands such as Hormel, Jennie-O, and Skippy.

How the Company Makes Money

Hormel Foods generates revenue primarily through the sale of its branded food products across different channels, including retail, foodservice, and international markets. The company's key revenue streams include the sale of refrigerated foods, grocery products, and international sales. Hormel leverages its strong brand portfolio to drive sales in supermarkets, club stores, and convenience stores. Additionally, the company partners with foodservice providers to supply ingredients and finished products to restaurants and other food outlets. Internationally, Hormel expands its market reach through strategic partnerships, joint ventures, and acquisitions, allowing it to tap into emerging markets and diversify its revenue base.

Hormel Foods Financial Statement Overview

Summary

Hormel Foods demonstrates financial resilience with a stable cash flow, prudent leverage, and operational efficiency. However, challenges in maintaining profitability due to declining net income and modest growth in equity and assets are noted.

Income Statement

Hormel Foods shows stable revenue with slight fluctuations over the years. The TTM (Trailing-Twelve-Months) gross profit margin stands at 16.51%, while the net profit margin is at 6.27%. Revenue growth has been sluggish, indicating a mature stage in the business cycle. The EBIT and EBITDA margins are healthy at 8.45% and 10.85%, respectively, suggesting operational efficiency. However, the recent decline in net income signals potential challenges in maintaining profitability.

Balance Sheet

The company maintains a solid balance sheet with a debt-to-equity ratio of 0.36, reflecting conservative leverage. The return on equity (ROE) is moderate at 9.31%, indicating decent shareholder returns. An equity ratio of 59.84% showcases a strong equity base. Overall, Hormel Foods demonstrates financial stability, though growth in equity and assets has been modest.

Cash Flow

Hormel Foods has a robust cash flow position, with a TTM free cash flow of $695.74 million. The operating cash flow to net income ratio is 1.33, showing effective cash conversion from operations. However, the free cash flow has decreased from the previous period, which could constrain future investments. The cash flow statement reflects a well-managed cash operation despite the downturn in free cash flow growth.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
11.92B	11.92B	12.11B	12.46B	11.39B	9.61B
	Gross Profit
1.97B	2.02B	2.00B	2.16B	1.93B	1.83B
	EBIT
1.01B	1.07B	1.07B	1.31B	1.12B	1.10B
	EBITDA
1.29B	1.37B	1.34B	1.58B	1.38B	1.34B
	Net Income Common Stockholders
747.49M	805.04M	793.57M	999.99M	908.84M	908.08M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
698.98M	766.62M	753.20M	998.26M	634.69M	1.73B
	Total Assets
13.42B	13.43B	13.45B	13.31B	12.70B	9.91B
	Total Debt
2.86B	2.86B	3.31B	3.30B	3.32B	1.30B
	Net Debt
2.19B	2.12B	2.57B	2.32B	2.71B	-410.68M
	Total Liabilities
5.38B	5.43B	5.71B	5.77B	5.72B	3.48B
	Stockholders Equity
8.03B	7.99B	7.73B	7.54B	6.97B	6.43B
Cash Flow		Free Cash Flow
695.74M	1.01B	777.64M	857.28M	771.73M	760.52M
	Operating Cash Flow
992.26M	1.27B	1.05B	1.13B	1.00B	1.13B
	Investing Cash Flow
-262.86M	-236.91M	-689.54M	-258.04M	-3.63B	-656.32M
	Financing Cash Flow
-1.54B	-1.03B	-600.06M	-486.68M	1.52B	566.17M

Hormel Foods Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 30.41
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 30.41 is below the 20-day moving average (MA) of 30.49, above the 50-day MA of 30.08, and above the 200-day MA of 30.17, indicating a neutral trend. The MACD of 0.12 indicates Positive momentum. The RSI at 50.96 is Neutral, neither overbought nor oversold. The STOCH value of 19.32 is Positive, 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	80 Outperform	$10.88B	9.04	36.53%	―	2.35%	145.82%
MKC	73 Outperform	$19.62B	25.13	14.73%	2.46%	0.40%	10.89%
HRL	71 Outperform	$16.58B	22.18	9.39%	3.85%	-1.01%	-2.93%
CAG	67 Neutral	$10.26B	31.46	3.67%	6.51%	-3.15%	-65.38%
CPB	65 Neutral	$9.50B	21.04	11.67%	4.90%	8.65%	-38.57%
Sector *	65 Neutral	$8.73B	15.14	4.69%	4.60%	3.64%	-2.51%
SJM	47 Neutral	$10.21B	22.22	-17.87%	4.50%	6.69%	-261.88%

Hormel Foods Corporate Events

Hormel Foods Elects D. Scott Aakre to Board

On May 15, 2025, Hormel Foods Corporation announced the election of D. Scott Aakre, their Group Vice President and Chief Marketing Officer – Retail, to the Board of Directors. As an existing employee, Mr. Aakre will not serve as an independent director or receive additional compensation for his board service, which may influence the company’s governance dynamics.

The most recent analyst rating on (HRL) stock is a Sell with a $28.00 price target. To see the full list of analyst forecasts on Hormel Foods stock, see the HRL Stock Forecast page.