Analysts Are on the Sidelines about Hormel Foods

75% rate HRL a “hold”

The majority of analysts have maintained a “hold” rating for Hormel Foods (HRL). As of September 19, of the 12 analysts covering the stock, 75.0% recommended a “hold.” Another 17.0% recommended a “buy,” and the remaining 8.0% recommended a “sell.”

Over the past 15 days, we have seen just one change in target price. On September 17, BMO upped the price target on Hormel Foods to $44.00 from $38.00. However, it slashed the rating on the stock to “market perform” from “outperform.” A Benzinga report cited BMO Capital Market analyst Kenneth Zaslow as saying, “Our case for aggressively investing in HRL is less persuasive at current valuations and trade uncertainties.”

Analysts Are on the Sidelines about Hormel Foods

Currently, analysts’ 12-month average target price for Hormel Foods stock is $36.58, which reflects a 7.8% downside to the stock price as of September 19. Hormel Foods is a leading name in the food and beverage space. The company has set up a strategic roadmap to a achieve 5% growth in sales by 2020. The company expects acquisitions to boost its growth prospects. In fiscal 2017, the company had reported negative sales growth of 3.7%.

However, higher freight costs, commodity inflation, consumers’ increasing preference for organic and healthy foods, and stiffening competition are weighing down the performance of major food retailers like Hormel Foods. Hormel Foods sold the Fremont processing facility to WholeStone Farms. It expects this facility divestment to reduce earnings volatility once concluded.

Ratings for peers

Out of 16 analysts covering Tyson Foods (TSN), 63% have provided a “buy” rating, while 31% have rated it as a “hold.” Currently, the analysts’ target price for Tyson Foods is $70.87, reflecting a 15.1% upside to the share price as of September 19.

For Pilgrim’s Pride (PPC), 44.0% of the nine analysts covering the stock have provided a “buy” rating, while the remaining 56.0% rated it as a “hold.” For Pilgrim’s Pride, the mean target price is $23.43, which indicates a 26.2% upside to the stock price.

Out of the 17 analysts covering Campbell Soup (CPB) stock, 53.0% of the analysts have provided a “sell” rating. Only 18.0% have rated it as a “buy.” For Campbell Soup, the mean target price is $37.00, which indicates a 7.8% downside to the stock price.