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Wall Street Analysts’ Recommendations for Hormel after 3Q16

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Target prices

Hormel Foods (HRL) released its fiscal 3Q16 earnings on August 18. In this part, we’ll see what Wall Street analysts assigned as target prices for the next 12 months and their recommendations after the earnings. Survey results show that analysts’ recommendations have changed with a slight increase in the target price. Around 27% of analysts rate Hormel a “buy,” ~64% rate it a “hold,” and 9% rate it a “sell.”

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Consensus rating for Hormel Foods

The average broker target price for Hormel rose to $40.89 from $39.75. This represents a 3% rise compared to the closing price of $39.51 on August 22.

Below are the target prices and return potentials for Hormel’s peers:

  • Tyson Foods (TSN) has a target price of $83.10 and a return potential of 10%.
  • ConAgra Foods (CAG) has a target price of $51.36 and a return potential of 9%.
  • Sanderson Farms (SAFM) has a target price of $89.17. It surpassed estimates by ~6%.

The First Trust Consumer Staples AlphaDEX Fund (FXG) invests 0.81% of its holdings in ConAgra, 3.6% of its holdings in Tyson, and 0.82% of its holdings in Hormel. The AdvisorShares TrimTabs Float Shrink ETF (TTFS) invests 1.3% of its portfolio in Sanderson Farms.

Recommendations for Hormel Foods

Stephens is consistent with its target price of $50 for Hormel—a 26% rise compared to the closing price on August 22. Stephens still rates the stock a “strong buy.” BMO Capital Markets is also consistent with its target price of $44—11% higher than the closing price on August 22. However, it upgraded the stock to a “strong buy” from “hold” after the earnings.

Buckingham Research Group still rates Hormel as a “hold.” However, it increased the target price to $40 from $36 after the earnings—1% higher than the closing price on August 22. Credit Suisse also upgraded the stock to a “strong buy” from a “hold.”

Hormel also received a “hold” rating from Edward Jones, Jefferies, Consumer Edge Research, Goldman Sachs, Morningstar, Buckingham Research Group, and Shore Capital Stockbrokers. Shore Capital Stockbrokers, Morningstar, and Edward Jones didn’t provide target prices for the stock.

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