Hormel Foods (HRL)
NYSE:HRL
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Hormel Foods
(NYSE:HRL)
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Rating:68Neutral
Price Target:
$24.50
▲(6.29% Upside)
Action:DowngradedDate: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
Brand portfolio strength
Hormel's well-known, diversified brand portfolio (SPAM, SKIPPY, Jennie‑O, Planters, Applegate) sustains shelf presence and consumer loyalty across channels. Durable brand equity supports pricing power, steady branded sales, and lowers revenue cyclicality versus commodity-only peers.
Negative Factors
Margin and profitability compression
Persistent margin compression versus 2021–22 signals weaker earnings power. Lower gross and operating margins reduce return on capital, constrain reinvestment and long‑term EPS growth, and make dividends and buybacks more sensitive to input and logistics shocks.
Read all positive and negative factors
Positive Factors
Negative Factors
Brand portfolio strength
Hormel's well-known, diversified brand portfolio (SPAM, SKIPPY, Jennie‑O, Planters, Applegate) sustains shelf presence and consumer loyalty across channels. Durable brand equity supports pricing power, steady branded sales, and lowers revenue cyclicality versus commodity-only peers.
Read all positive factors
Hormel Foods (HRL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.68B
Dividend Yield4.82%
Average Volume (3M)4.65M
Price to Earnings (P/E)18.8
Beta (1Y)0.20
Revenue Growth1.55%
EPS Growth-40.81%
CountryUS
Employees20,000
SectorConsumer Defensive
Sector Strength42
IndustryPackaged Foods
Share Statistics
EPS (TTM)0.34
Shares Outstanding550,284,200
10 Day Avg. Volume4,327,891
30 Day Avg. Volume4,645,279
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 Cap1.15
Enterprise Value/Revenue1.20
Enterprise Value/Gross Profit7.72
Enterprise Value/Ebitda14.23
Forecast
1Y Price Target
$28.00Price Target Upside21.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)1.47
Revenue Forecast (FY)$12.32B
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: Grocer...
How the Company Makes Money
Hormel makes money by selling branded and private-label food products to customers across its operating segments, generating revenue when products are shipped and delivered under customer contracts. Its primary revenue stream is product sales to (...
Hormel Foods Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes revenue from different business segments, revealing which product lines or services are driving growth for Hormel Foods. This helps investors assess the company's diversification and potential vulnerabilities or strengths in specific markets.
Analyzes revenue from different business segments, revealing which product lines or services are driving growth for Hormel Foods. This helps investors assess the company's diversification and potential vulnerabilities or strengths in specific markets.
Data provided by:
The Fly
The FlyHormel Foods Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:May 28, 2026
Earnings Call Sentiment Neutral
The call presented a balanced picture: the company delivered another quarter of organic growth, solid cash flow, strong Foodservice and International performance, and management reaffirmed full-year guidance while progressing restructuring and strategic portfolio moves (including the whole-bird turkey divestiture) to sharpen focus and improve margins. Offsetting these positives are meaningful near-term headwinds — retail top-line softness, persistent commodity inflation (notably beef and pork trim up 12% year-over-year for pork trim), and unexpected freight/logistics cost increases that compressed gross profit in Q1 and may persist into Q2. Management expects sequential improvement driven by pricing, restructuring benefits and modest commodity relief in the back half of the year, but execution risk from logistics and retail elasticities keeps the outlook cautious.Positive Updates
Consecutive Organic Net Sales Growth
Organic net sales grew 2% in Q1 (fifth consecutive quarter of organic net sales growth); total Q1 net sales were just over $3.0 billion.
Negative Updates
Retail Segment Softness
Retail organic volume and organic net sales declined in Q1 (Retail net sales down ~2% year-over-year). Profitability in Retail was pressured by higher input costs, unexpected logistics expenses and the strategic exit from select non-core private-label snack nut items.
Read all updates
Q1-2026 Updates
Positive
Negative
Consecutive Organic Net Sales Growth
Organic net sales grew 2% in Q1 (fifth consecutive quarter of organic net sales growth); total Q1 net sales were just over $3.0 billion.
Read all positive updates
Company Guidance
Hormel reiterated Q2 expectations for another quarter of top‑line growth with adjusted diluted EPS flat to slightly up year‑over‑year, and reaffirmed full‑year fiscal 2026 guidance of organic net sales growth of 1%–4%, adjusted operating income growth of 4%–10% and adjusted diluted EPS of $1.43–$1.51. In Q1 the company reported net sales just over $3.0 billion, organic net sales +2% (fifth consecutive quarter), adjusted operating income $247 million (adjusted operating margin 8.2%), adjusted diluted EPS $0.34 (GAAP diluted EPS $0.33), cash flow from operations $349 million, capex $69 million (FY26 capex expected $260–$290 million), and an effective tax rate of 22.4%; dividends continued (390th consecutive quarterly dividend, ~ $160 million returned). Management said restructuring savings begin to flow in Q2, a second wave of retail pricing was implemented at the start of Q2, they expect modest commodity improvement in H2 (pork trim was +12% y/y; pork costs expected lower vs FY25 but above the 5‑year average; beef to remain a headwind; nut costs elevated), noted elevated logistics/freight pressures late Q1 into Q2, and that the pending whole‑bird turkey divestiture should reduce FY26 net sales by roughly $50 million (historically annualized whole‑bird sales ~$200–$275 million) with minimal FY26 adjusted financial impact.Hormel Foods Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
78
Positive
Cash Flow
70
Positive
| 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 | 489.39M | 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 | 2.86B | 2.86B | 2.86B | 3.31B | 3.30B | 3.32B |
| Total Liabilities | 5.36B | 5.48B | 5.43B | 5.71B | 5.77B | 5.72B |
| Stockholders Equity | 7.94B | 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
Negative
23.05
Price Trends
24.12
Negative
23.45
Negative
25.03
Negative
Market Momentum
-0.49
Positive
45.36
Neutral
55.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HRL, the sentiment is Negative. The current price of 23.05 is below the 20-day moving average (MA) of 23.47, below the 50-day MA of 24.12, and below the 200-day MA of 25.03, indicating a bearish trend. The MACD of -0.49 indicates Positive momentum. The RSI at 45.36 is Neutral, neither overbought nor oversold. The STOCH value of 55.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $8.41B | 8.73 | 30.72% | ― | 1.81% | 24.67% | |
68 Neutral | $12.68B | 18.81 | 6.13% | 4.82% | 1.55% | -40.81% | |
66 Neutral | $16.83B | 2.67 | 32.16% | 9.72% | ― | 119.48% | |
63 Neutral | $14.15B | 22.59 | 14.03% | 2.61% | 1.64% | -1.83% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
61 Neutral | $10.17B | -3.86 | -21.55% | 4.45% | -0.66% | -326.55% | |
54 Neutral | $6.20B | 14.14 | 13.98% | 5.64% | 2.71% | 4.90% |
* Consumer Defensive Sector Average
HRL
Hormel Foods
23.05
-5.96
-20.54%
CPB
Campbell Soup
20.81
-16.86
-44.76%
SJM
JM Smucker
95.39
-16.81
-14.99%
MKC
McCormick & Company
52.78
-26.77
-33.65%
PPC
Pilgrim's Pride
35.42
-9.68
-21.46%
JBS
JBS
15.75
2.17
15.98%
Hormel Foods Corporate Events
Business Operations and StrategyShareholder Meetings
Hormel Shareholders Approve 2026 Equity and Severance Plans
Positive
Feb 2, 2026
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-ba...
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.