Why Most Analysts Recommend ‘Hold’ for Hormel Foods

Rating synopsis

Most (58%) of the 12 analysts covering Hormel Foods (HRL) on July 12 recommended “hold,” and the rest recommended “buy.” Packaged food manufacturers are facing several challenges stemming from commodity inflation, tough competition, private label products, and a shift toward organic and healthy foods. These factors are weighing down on the profitability of major food retailers, and Hormel Foods is no exception. The recent tariffs have also added to the company’s concerns. Hormel aims to grow its sales by 5% by 2020 and expects acquisitions and higher deli and value-added refrigerated product sales to boost growth.

Analysts haven’t revised their price targets for HRL stock in the last 30 days. Their 12-month average target price for HRL is $35.67, which reflects a 5.0% downside to the stock’s July 12 price.

Why Most Analysts Recommend ‘Hold’ for Hormel Foods

Peers’ ratings

Of the 16 analysts covering Tyson Foods (TSN), 69% have recommended “buy,” and 31% have recommended “hold.” Their target price for the stock is $79.81, which reflects a 21.0% upside to its July 12 price.

Of the eight analysts covering Pilgrim’s Pride (PPC), 63% have recommended “hold,” and 37% have recommended “buy.” Their target price for the stock is stock is $25.50, which reflects a 34.3% upside to its July 12 price.

Of the 11 analysts covering Sanderson Farms (SAFM) stock, 55% have recommended “hold,” and 36% have recommended “sell.” Their target price for the stock is stock is $98.11, which reflects a 7.8% upside to its July 12 price.