Hormel Foods (HRL) AI Stock Analysis

• Market Cap: $16.08B
• Dividend Yield: 3.94%
• Average Volume (3M): 3.24M
• Price to Earnings (P/E): 21.5
• Beta (1Y): 0.13
• Revenue Growth: -1.01%
• EPS Growth: -2.93%
• Country: US
• Employees: 20,000
• Sector: Consumer Defensive
• Sector Strength: 54
• Industry: Packaged Foods
• EPS (TTM): 0.35
• Shares Outstanding: 549,894,600
• 10 Day Avg. Volume: 3,547,852
• 30 Day Avg. Volume: 3,235,937
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.15
• Enterprise Value/Revenue: 1.55
• Enterprise Value/Gross Profit: 9.41
• Enterprise Value/Ebitda: 14.31
• 1Y Price Target: $33.17
• Price Target Upside: 13.40% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 66 Neutral
• Price Target: $31.00 ▲(5.98% Upside)

Hormel Foods' overall score reflects its financial stability and positive earnings outlook, despite technical weakness and challenges from higher commodity costs. The company's strategic initiatives and strong dividend yield provide additional support.

Positive Factors

Margin Improvement

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.

Market Dynamics

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

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 Decline

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 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 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 displays financial resilience with consistent operational performance and a solid balance sheet. While declining net income poses profitability challenges, the company maintains stable cash flow and prudent leverage levels, indicating potential for steady growth.

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

Hormel Foods Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 29.25
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Neutral. The current price of 29.25 is above the 20-day moving average (MA) of 28.51, below the 50-day MA of 29.40, and below the 200-day MA of 29.63, indicating a neutral trend. The MACD of -0.15 indicates Negative momentum. The RSI at 55.89 is Neutral, neither overbought nor oversold. The STOCH value of 67.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	$10.97B	8.89	33.13%	―	2.06%	63.27%
CAG	72 Outperform	$9.39B	8.18	13.27%	7.12%	-3.64%	231.77%
MKC	69 Neutral	$19.39B	25.09	14.19%	2.45%	0.89%	4.85%
HRL	66 Neutral	$16.08B	21.51	9.39%	3.94%	-1.01%	-2.93%
CPB	66 Neutral	$9.88B	21.90	11.67%	4.65%	8.65%	-38.57%
Sector *	63 Neutral	$20.85B	14.73	-4.08%	3.09%	2.70%	-8.60%
SJM	60 Neutral	$12.08B	22.22	-17.87%	3.83%	6.69%	-261.87%

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.