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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on HRL

Hormel Foods Corporation faces challenges, including investigations by law firms Levi & Korsinsky and Rosen Law Firm regarding potential securities claims. The company cut its forecast due to price pressure and a weak consumer backdrop. Additionally, Hormel reported Q4 earnings exceeding $12 billion in net sales, representing 2% organic growth. However, operating income was $719 million, with adjusted operating income over $1 billion. The company also faces rising input costs and slow pricing recovery, threatening near-term margins. A Hold rating is warranted pending evidence of sustained profit and cash flow improvement.

1.c. Company Highlights

2. Hormel Foods Corporation's Fiscal 2025 Results: Navigating Challenges and Positioning for Growth

Hormel Foods Corporation reported net sales exceeding $12 billion in fiscal 2025, representing a 2% organic growth over the prior year. However, profitability was pressured, with operating income at $719 million and adjusted operating income at just over $1 billion. Diluted EPS was 87¢, and adjusted diluted EPS was $1.37. The actual EPS came out at $0.32, slightly beating estimates of $0.3017. Despite the challenges, the company delivered four consecutive quarters of year-over-year organic net sales growth, driven by brands such as Jennie-O, Applegate, and Spam.

Publication Date: Dec -07

📋 Highlights
  • Net Sales Growth:: Exceeded $12 billion with 2% organic growth in fiscal 2025.
  • Operating Income:: Operating income at $719 million vs. adjusted operating income of $1.01 billion.
  • Dividend Increase:: 1% raise to quarterly dividend, 60th consecutive year of increases (annualized $1.17/share in 2026).
  • 2026 Guidance:: Organic net sales growth of 1–4% and adjusted operating income growth of 4–10%.
  • Restructuring Benefits:: $20–25 million cost to implement, with $60–$90 million in savings (up to $30 million to bottom line).

Guidance and Outlook for Fiscal 2026

The company expects to build on its top-line strength in 2026, with a focus on winning in attractive consumption spaces and positioning its brands and innovation for growth. Hormel Foods expects organic net sales growth of 1% to 4% and adjusted operating income growth of 4% to 10% in fiscal 2026. The guidance includes assumptions such as pork input costs declining compared to fiscal 2025, but beef and nut costs remaining high. Analysts estimate next year's revenue growth at 1.8%, which is within the company's guidance range.

Valuation and Dividend Yield

With a P/E Ratio of 28.02 and a Dividend Yield of 4.77%, Hormel Foods Corporation is offering a relatively attractive yield to investors. The company's P/B Ratio is 1.18, indicating a reasonable valuation. The EV/EBITDA ratio is 15.49, which is a moderate valuation multiple. The company's strong financial position, ample liquidity, and conservative level of debt support its ability to continue delivering value to shareholders.

Segment Performance and Expectations

The company expects each of its segments to deliver both top-line and segment profit growth in fiscal 2026. Retail is expected to have modest declines in volume with low single-digit increases in net sales, while foodservice expects low single-digit increases in volume with net sales in the mid-single digits. International expects low single-digit increases in volume with high single-digit increases in net sales. The company is focusing on fueling trends, becoming future-ready, and portfolio reshaping to drive growth.

Raw Material Input Costs and Tariffs

Pork, shrimp, and beef remain a headwind year over year, but the company expects year-over-year relief in bellies and improved pork benefits in the second half of 2026. The company feels fairly insulated from tariffs and expects $25 to $35 million in tariff expenses in 2026, mainly related to steel and aluminum supplies. The cost to implement changes is estimated to be $20-25 million, which could lead to $60 million in savings.

Transformation and Modernization Efforts

The company has taken steps to help its bottom-line performance catch up with its top-line momentum, including pricing flow-through, mix improvement, and benefits from the transform and modernize program. The company expects to see financial benefits in 2026 from its transformation and marketing expenses, although it did not provide a breakout for 2026. The expected gross margin expansion driven by mix improvements, pricing benefits, and productivity from the transform and modernize initiative is a positive sign for the company's profitability.

3. NewsRoom

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Hormel Foods Analysts Boost Their Forecasts Following Upbeat Q4 Earnings

Dec -05

Source: benzinga.com

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Hormel Foods Corp (HRL) Q4 2025 Earnings Call Highlights: Navigating Growth Amidst Commodity Challenges

Dec -04

Source: gurufocus.com

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Hormel Foods Corporation (HRL) Q4 2025 Earnings Call Transcript

Dec -04

Source: seekingalpha.com

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Dow Jones Today: Major Stock Indexes Little Changed; Weekly Jobless Claims Unexpectedly Fall; Inflation Data on Tap Tomorrow

Dec -04

Source: investopedia.com

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Hormel's Strong FY2026 EPS View: Is It Enough To Break The Downtrend?

Dec -04

Source: seekingalpha.com

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Hormel Foods Q4 Earnings Beat Estimates, Sales Increase Y/Y

Dec -04

Source: zacks.com

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Hormel (HRL) Q4 Earnings: How Key Metrics Compare to Wall Street Estimates

Dec -04

Source: zacks.com

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Live Nasdaq Composite: Markets Hunt Direction as Meta Captures Spotlight

Dec -04

Source: 247wallst.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.27%)

6. Segments

Retail

Expected Growth: 2.5%

Hormel Foods Corporation's Retail segment growth of 2.5% is driven by increasing demand for convenient and protein-rich products, particularly in the deli and meat snacks categories. Strong brand recognition, innovative product launches, and strategic pricing also contribute to growth. Additionally, the company's focus on e-commerce and digital marketing helps to expand its customer base and increase sales.

Food Service

Expected Growth: 1.8%

Hormel Foods Corporation's Food Service segment growth of 1.8% is driven by increasing demand for convenient, portable, and protein-rich food products, particularly in the education and healthcare channels. Additionally, strategic acquisitions, product innovation, and expanded distribution networks have contributed to the segment's growth.

International

Expected Growth: 2.2%

Hormel Foods' international segment growth of 2.2% is driven by increasing demand for protein-rich products, particularly in Asia and Latin America. Strong sales of Spam and Skippy peanut butter in these regions, coupled with strategic acquisitions and partnerships, have contributed to the segment's growth. Additionally, the company's focus on e-commerce and digital marketing has helped expand its international presence.

7. Detailed Products

Refrigerated Foods

Hormel Foods' Refrigerated Foods segment offers a variety of products, including hams, bacon, sausages, and deli meats.

Jennie-O Turkey Store

Jennie-O Turkey Store offers a range of turkey-based products, including whole turkeys, turkey breasts, and turkey sausages.

Grocery Products

Hormel Foods' Grocery Products segment includes a variety of canned goods, such as SPAM, Dinty Moore stew, and Hormel chili.

International & Other

This segment includes Hormel Foods' international business, as well as other products and services, such as nutritional products and foodservice offerings.

Skippy Peanut Butter

Skippy peanut butter is a popular brand of creamy and crunchy peanut butter.

MegaMex Foods

MegaMex Foods offers a range of Mexican-inspired foods, including Wholly Guacamole and La Tortilla Factory.

8. Hormel Foods Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Hormel Foods Corporation faces moderate threat from substitutes due to the presence of alternative protein sources such as plant-based meat alternatives and other packaged meat products.

Bargaining Power Of Customers

Hormel Foods Corporation has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand portfolio and wide distribution network make it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Hormel Foods Corporation relies on a network of suppliers for raw materials such as pork, beef, and poultry. While the company has some bargaining power due to its scale, suppliers may still exert some pressure on prices and quality.

Threat Of New Entrants

The threat of new entrants is low in the packaged meat industry due to high barriers to entry, including significant capital requirements, regulatory hurdles, and the need for established distribution networks.

Intensity Of Rivalry

The packaged meat industry is highly competitive, with several established players competing for market share. Hormel Foods Corporation faces intense rivalry from companies such as Tyson Foods, Cargill, and JBS USA.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 29.95%
Debt Cost 3.95%
Equity Weight 70.05%
Equity Cost 5.31%
WACC 4.90%
Leverage 42.76%

11. Quality Control: Hormel Foods Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Lancaster Colony

A-Score: 5.7/10

Value: 3.6

Growth: 5.9

Quality: 7.1

Yield: 4.0

Momentum: 4.0

Volatility: 9.3

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Hormel Foods

A-Score: 5.3/10

Value: 5.8

Growth: 4.0

Quality: 5.5

Yield: 7.0

Momentum: 1.0

Volatility: 8.3

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McCormick

A-Score: 5.0/10

Value: 3.3

Growth: 4.2

Quality: 6.1

Yield: 5.0

Momentum: 2.5

Volatility: 9.0

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Simply Good Foods

A-Score: 4.2/10

Value: 5.6

Growth: 5.4

Quality: 6.6

Yield: 0.0

Momentum: 1.0

Volatility: 6.7

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Freshpet

A-Score: 3.3/10

Value: 2.1

Growth: 9.1

Quality: 4.2

Yield: 0.0

Momentum: 0.5

Volatility: 4.0

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BellRing Brands

A-Score: 3.1/10

Value: 5.4

Growth: 2.7

Quality: 6.1

Yield: 0.0

Momentum: 0.5

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

23.66$

Current Price

23.66$

Potential

-0.00%

Expected Cash-Flows