Hormel Foods (HRL) AI Stock Analysis

• Market Cap: $13.79B
• Dividend Yield: 4.66%
• Average Volume (3M): 4.15M
• Price to Earnings (P/E): 18.3
• Beta (1Y): 0.14
• Revenue Growth: 0.65%
• EPS Growth: -3.76%
• Country: US
• Employees: 20,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 0.35
• Shares Outstanding: 549,998,400
• 10 Day Avg. Volume: 4,400,102
• 30 Day Avg. Volume: 4,153,421
• PEG Ratio: 15.27
• Price to Book (P/B): 2.12
• Price to Sales (P/S): 1.42
• P/FCF Ratio: 16.79
• Enterprise Value/Market Cap: 1.33
• Enterprise Value/Revenue: 1.52
• Enterprise Value/Gross Profit: 9.32
• Enterprise Value/Ebitda: 14.06
• 1Y Price Target: $29.71
• Price Target Upside: 20.14% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 63 Neutral
• Price Target: $27.00 ▲(9.18% Upside)

Hormel Foods' overall stock score reflects stable financial performance and attractive valuation, but is tempered by bearish technical indicators and near-term profitability challenges highlighted in the earnings call. The company's strategic initiatives offer potential for future growth, but current market conditions and cost pressures present risks.

Positive Factors

Revenue Growth

Consistent revenue growth across all segments indicates strong market demand and effective sales strategies, supporting long-term business expansion.

Leadership Change

The leadership transition with experienced executives aims to ensure strategic continuity and stability, potentially driving future growth and operational efficiency.

Strategic Initiatives

The T and M program focuses on operational improvements and cost efficiencies, enhancing long-term profitability and competitive positioning.

Negative Factors

Commodity Cost Inflation

Rising input costs, particularly in pork and beef, pressure margins and challenge profitability, potentially impacting financial performance if not mitigated.

Profitability Challenges

Lagging profitability despite revenue growth suggests inefficiencies in cost management, necessitating strategic adjustments for sustainable earnings.

Cash Flow Decline

Reduced cash flow growth limits the company's ability to invest in new opportunities, potentially hindering long-term strategic initiatives and expansion.

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 key streams, primarily from the sale of its branded food products across various categories. The company's revenue model is supported by a strong presence in both retail and foodservice channels, allowing it to reach a wide consumer base. Key revenue streams include sales from refrigerated foods such as meats and deli products, grocery products like canned goods and condiments, and international sales that tap into global markets. Additionally, Hormel has built significant partnerships with major retailers and distributors, enhancing its market reach. The company's focus on innovation, including the introduction of new products and health-conscious offerings, also contributes to its earnings by attracting diverse consumer preferences and adapting to market trends.

Hormel Foods Financial Statement Overview

Summary

Hormel Foods demonstrates stable financial performance with consistent revenue growth and strong operational margins. However, challenges in profitability and cash flow generation are noted, despite a solid balance sheet with improved leverage and a strong equity position.

Income Statement

Hormel Foods shows a stable revenue growth with a slight increase in the TTM period. The gross profit margin has seen a minor decline, indicating some pressure on cost management. Net profit margin has also decreased slightly, reflecting challenges in maintaining profitability. However, the company maintains a healthy EBIT and EBITDA margin, showcasing operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has improved over time, indicating better leverage management. Return on equity has decreased slightly, suggesting a need for enhanced profitability. The equity ratio remains strong, reflecting a solid financial foundation.

Cash Flow

Hormel Foods experienced a decline in free cash flow growth, which could impact future investments. The operating cash flow to net income ratio has decreased, indicating potential challenges in cash generation. However, the free cash flow to net income ratio remains healthy, suggesting efficient cash management relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	12.06B	11.92B	12.11B	12.46B	11.39B	9.61B
Gross Profit	1.97B	2.02B	2.00B	2.16B	1.93B	1.83B
EBITDA	1.30B	1.37B	1.34B	1.58B	1.38B	1.34B
Net Income	754.53M	805.04M	793.57M	999.99M	908.84M	908.08M
Balance Sheet
Total Assets	13.50B	13.43B	13.45B	13.31B	12.70B	9.91B
Cash, Cash Equivalents and Short-Term Investments	630.67M	766.62M	753.20M	998.26M	634.69M	1.73B
Total Debt	2.86B	2.86B	3.31B	3.30B	3.32B	1.30B
Total Liabilities	5.40B	5.43B	5.71B	5.77B	5.72B	3.48B
Stockholders Equity	8.08B	7.99B	7.73B	7.54B	6.97B	6.43B
Cash Flow
Free Cash Flow	627.74M	1.01B	777.64M	857.28M	771.73M	760.52M
Operating Cash Flow	930.97M	1.27B	1.05B	1.13B	1.00B	1.13B
Investing Cash Flow	-265.00M	-236.91M	-689.54M	-258.04M	-3.63B	-656.32M
Financing Cash Flow	-606.16M	-1.03B	-600.06M	-486.68M	1.52B	566.17M

Hormel Foods Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 24.73
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 24.73 is below the 20-day moving average (MA) of 26.67, below the 50-day MA of 28.15, and below the 200-day MA of 29.38, indicating a bearish trend. The MACD of -1.00 indicates Positive momentum. The RSI at 30.75 is Neutral, neither overbought nor oversold. The STOCH value of 34.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HRL.

Hormel Foods Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PPC	79 Outperform	$10.36B	8.40	33.13%	―	2.06%	63.27%
JBS	73 Outperform	$16.70B	12.05	17.67%	0.01%	―	288.18%
CPB	69 Neutral	$9.91B	16.53	15.64%	4.69%	6.40%	6.17%
MKC	69 Neutral	$18.50B	23.94	14.19%	2.68%	0.89%	4.85%
HRL	63 Neutral	$13.79B	18.29	9.46%	4.66%	0.65%	-3.76%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
SJM	52 Neutral	$11.50B	22.22	-21.32%	4.03%	2.54%	-293.39%

Hormel Foods Corporate Events

Hormel Foods Announces Leadership Changes Effective July 2025

Hormel Foods announced leadership changes effective July 14, 2025, with Jeffrey M. Ettinger appointed as Interim CEO and John F. Ghingo as President. These appointments follow the retirement of current CEO James P. Snee at the end of fiscal year 2025. Ettinger, with previous experience as CEO and board member, brings extensive knowledge to the role, while Ghingo, with over 20 years in the industry, steps in as President. The company has outlined detailed compensation and benefits packages for both executives, indicating a strategic transition plan to maintain stability and continuity in leadership.