Credit Suisse Reiterates a Buy Rating on Hormel Foods

By Ryan Adsit

In a report released yesterday, Robert Moskow from Credit Suisse reiterated a Buy rating on Hormel Foods (NYSE: HRL), with a price target of $41. The company’s shares opened today at $35.76.

Moskow said:

“We are maintaining our FY 17 EPS estimate of $1.72. Our estimate for 10% EPS growth in FY 18 indicates our conviction that the benefit to Hormel’s value-added products from higher raw material availability (even if it comes from third parties) outweighs the negative from lower fresh pork margins as new industry capacity comes on-line.”

According to TipRanks.com, Moskow is a 1-star analyst with an average return of -1.1% and a 36.9% success rate. Moskow covers the Consumer Goods sector, focusing on stocks such as Archer Daniels Midland, Mondelez International, and Amplify Snack Brands.

Currently, the analyst consensus on Hormel Foods is Moderate Buy and the average price target is $38, representing a 6.3% upside.

In a report released yesterday, BMO Capital also reiterated a Buy rating on the stock.

Based on Hormel Foods’ latest earnings report for the quarter ending October 31, the company posted quarterly revenue of $2.63 billion and quarterly net profit of $244 million. In comparison, last year the company earned revenue of $2.4 billion and had a net profit of $187 million.

Based on the recent corporate insider activity of 76 insiders, corporate insider sentiment is negative on the stock. Most recently, in September 2016, Elsa Murano, a Director at HRL bought 6,800 shares for a total of $60,724.

Hormel Foods Corp. engages in the production of meat and food products. It operates business through the following segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other. The Grocery Products segment consists primarily of the processing, marketing, and sale of shelf-stable food products sold in the retail market. The Refrigerated Foods segment involves in the processing, marketing, and sale of branded and unbranded pork and beef products for retail, foodservice and fresh product customers. The Jennie-O Turkey Store segment include fresh ground turkey, rotisserie deli turkey products, nacho platters, turkey bacon, turkey burgers and other turkey products to consumers and foodservice operators. The Specialty Foods segment includes Omega-3 fish oils, stocks and broths, pasteurized processed cheeses and imitation blends, milk and whey proteins, dry milk powders, caseinates and isolates, meat ingredients, gelatin desserts, puddings, drinks, seasoning oils, sauces, and specialty fats. The International & Other segment includes the Hormel Foods International operating segment, which manufactures, markets, and sells company products internationally. The company was founded by George A. Hormel in 1891 and is headquartered in Austin, MN.