Hormel Foods (HRL) AI Stock Analysis

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Hormel Foods

(NYSE:HRL)

Rating:68Neutral

Price Target:

$33.00

▲(8.16%Upside)

Hormel Foods' overall stock score reflects its financial stability and positive strategic outlook, despite valuation concerns. The company's resilience and strategic execution in a challenging environment are key strengths, supported by a healthy dividend yield and stable technical indicators.

Positive Factors

Cost Structure

Grain costs have dissipated and turkey prices are rebounding, setting up improved margin structure and potential for turkey profit recovery.

Financial Performance

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

Market Dynamics

Current market dynamics are rewarding stocks with near-term EPS visibility/low revision risk.

Negative Factors

Earnings 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 Goals

1Q heightens execution risk as HRL attempts to achieve its longer-term FY26 profit goals.

Supply Chain Issues

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 (HRL) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$16.78B

Dividend Yield3.8%

Average Volume (3M)3.13M

Price to Earnings (P/E)22.4

Beta (1Y)0.14

Revenue Growth-1.01%

EPS Growth-2.93%

CountryUS

Employees20,000

SectorConsumer Defensive

Sector Strength55

IndustryPackaged Foods

Share Statistics

EPS (TTM)0.35

Shares Outstanding549,894,600

10 Day Avg. Volume3,211,703

30 Day Avg. Volume3,130,636

Financial Highlights & Ratios

PEG Ratio-15.45

Price to Book (P/B)2.08

Price to Sales (P/S)0.00

P/FCF Ratio24.04

Enterprise Value/Market Cap1.13

Enterprise Value/Revenue0.40

Enterprise Value/Gross Profit9.60

Enterprise Value/Ebitda3.58

Forecast

1Y Price Target

$33.00

Price Target Upside8.16% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

Hormel Foods Business Overview & Revenue Model

Company DescriptionHormel 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 MoneyHormel 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 Key Performance Indicators (KPIs)

Any

Revenue by Segment

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.

Chart InsightsHormel Foods' International segment shows a recovery trajectory, with recent quarters reflecting steady growth after a dip in early 2023. The latest earnings call highlights strong performance in exports and China, aligning with the high single-digit growth forecast. Meanwhile, the US Retail segment faces challenges, with growth slowing, yet innovations and brand leadership offer potential upside. The US Foodservice segment is rebounding, supported by mid-single-digit growth expectations. Despite macroeconomic pressures and higher commodity costs, Hormel's strategic initiatives aim to bolster margins and drive future growth.

Data provided by:

Main Street Data

Hormel Foods Earnings Call Summary

Earnings Call Date:May 30, 2025

(Q2-2025)

% Change Since: 0.43%|

Next Earnings Date:Aug 28, 2025

Earnings Call Sentiment Positive

Hormel Foods has demonstrated strong resilience and strategic execution in the face of challenging macroeconomic conditions. The company's diverse portfolio and successful innovations have contributed to solid organic growth, particularly in the Retail and International segments. However, higher commodity costs and decreased investment income present challenges. The overall outlook remains confident with a focus on the Transform and Modernize initiative for future growth.

Q2-2025 Updates

Positive Updates

Strong Organic Top-Line Growth

Hormel Foods achieved a 1% organic increase in net sales over the previous year, reaching $2.9 billion for the quarter.

Retail Segment Performance

The Planters brand exceeded volume and net sales expectations, and flagship and rising brands maintained leadership positions in the marketplace.

Successful Innovations and Launches

Innovations like Applegate's Convenience Breakfast platform and new product lines, as well as Fontanini hot honey sliced sausage, contributed to growth.

International Growth

The international segment delivered strong top-line growth, driven by double-digit volume and net sales growth in exports and robust growth in China.

Transform and Modernize Initiative on Track

The initiative is projected to deliver $100 million to $150 million in incremental benefits, with successful projects including supply chain enhancements.

Negative Updates

Higher Commodity Input Costs

Gross profit margin was impacted by anticipated higher commodity input costs, leading to a margin of 16.7%.

Interest and Investment Income Decrease

Interest and investment income decreased primarily due to lower cash balances and performance from the rabbi trust.

Macroeconomic Challenges

The global environment remains dynamic with tariff impacts and consumer sentiment described as strained, impacting overall strategic execution.

Company Guidance

In the second quarter of fiscal 2025, Hormel Foods Corporation reported net sales of $2.9 billion, reflecting a 1% organic increase compared to the previous year. The company anticipates strong second-half growth, projecting net sales growth of 2% to 3% for the full year. Adjusted diluted earnings per share are expected to be between $1.58 and $1.68, considering factors like consumer trends, tariffs, and investment income. Retail is projected to see low single-digit growth, Foodservice mid-single-digit growth, and International high single-digit growth, with overall margins expected to expand. Hormel's Transform and Modernize initiative is on track, targeting $100 million to $150 million in incremental benefits, and the company continues to focus on value-added products, particularly in its Turkey portfolio.

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

Positive

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

Positive

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

Positive

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
EBITDA	1.29B	1.37B	1.34B	1.58B	1.38B	1.34B
Net Income	747.49M	805.04M	793.57M	999.99M	908.84M	908.08M
Balance Sheet
Total Assets	13.42B	13.43B	13.45B	13.31B	12.70B	9.91B
Cash, Cash Equivalents and Short-Term Investments	698.98M	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	5.38B	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

Neutral

Last Price30.51

Price Trends

50DMA

30.24

Positive

100DMA

29.89

Positive

200DMA

30.13

Positive

Market Momentum

MACD

0.17

Negative

RSI

49.14

Neutral

STOCH

70.05

Neutral

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 30.51 is below the 20-day moving average (MA) of 30.58, above the 50-day MA of 30.24, and above the 200-day MA of 30.13, indicating a neutral trend. The MACD of 0.17 indicates Negative momentum. The RSI at 49.14 is Neutral, neither overbought nor oversold. The STOCH value of 70.05 is Neutral, 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 20 risk factors in its most recent earnings report. Hormel Foods reported the most risks in the "Ability to Sell" 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

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PPC	75 Outperform	$10.68B	8.88	36.53%	―	2.35%	145.82%
MKC	69 Neutral	$19.31B	24.99	14.19%	2.50%	0.89%	4.85%
HRL	68 Neutral	$16.78B	22.44	9.39%	3.80%	-1.01%	-2.93%
CAG	67 Neutral	$9.26B	8.08	13.27%	7.22%	-3.15%	-65.38%
Sector *	64 Neutral	CHF34.00B	22.18	7.59%	2.58%	7.49%	-28.47%
CPB	61 Neutral	$9.31B	20.64	11.67%	4.99%	8.65%	-38.57%
SJM	47 Neutral	$11.18B	22.22	-17.87%	4.12%	6.69%	-261.87%

* Consumer Defensive Sector Average

Performance Comparison

HRL

Hormel Foods

30.51

0.82

2.76%

CPB

Campbell Soup

31.24

-12.60

-28.74%

CAG

Conagra Brands

19.40

-7.76

-28.57%

SJM

JM Smucker

104.76

-7.19

-6.42%

MKC

McCormick & Company

71.95

0.85

1.20%

PPC

Pilgrim's Pride

45.06

11.13

32.80%

Hormel Foods Corporate Events

Executive/Board Changes

Hormel Foods Announces Leadership Changes Effective July 2025

Neutral

Jun 23, 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.

The most recent analyst rating on (HRL) stock is a Hold with a $31.00 price target. To see the full list of analyst forecasts on Hormel Foods stock, see the HRL Stock Forecast page.

Executive/Board Changes

Hormel Foods Elects D. Scott Aakre to Board

Neutral

May 16, 2025

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.

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.Date of analysis: Jun 28, 2025