Hormel Foods (NYSE:HRL) Hits New 1-Year Low - Should You Sell?

Key Points

• Hormel Foods shares fell to a new 52-week low of $19.37, well below their 50-day and 200-day moving averages of $22.24 and $22.71.
• Analysts maintain a predominantly cautious view, with an average rating of “Hold” and a $25.71 price target; BNP Paribas Exane cut its target to $23, while Weiss Ratings downgraded the stock to “Sell.”
• Hormel beat quarterly EPS expectations but missed revenue estimates, with sales down 2.4% year over year. The company declared a $0.2925 quarterly dividend, equal to a 6.0% yield, though its 185.71% payout ratio raises sustainability concerns.

Hormel Foods Corporation (NYSE:HRL - Get Free Report)'s share price reached a new 52-week low during mid-day trading on Thursday. The stock traded as low as $19.37 and last traded at $19.5170, with a volume of 297979 shares. The stock had previously closed at $19.55.

Analysts Set New Price Targets

Several research firms have issued reports on HRL. Piper Sandler reaffirmed a "neutral" rating on shares of Hormel Foods in a report on Tuesday. Stephens set a $23.00 price objective on Hormel Foods in a research note on Friday, August 28th. BNP Paribas Exane restated a "neutral" rating and issued a $23.00 target price (down from $26.00) on shares of Hormel Foods in a report on Wednesday. Bank of America boosted their target price on Hormel Foods from $25.00 to $27.00 and gave the stock a "neutral" rating in a research report on Tuesday, June 30th. Finally, Weiss Ratings lowered Hormel Foods from a "hold (c-)" rating to a "sell (d+)" rating in a research report on Friday, August 28th. Two analysts have rated the stock with a Buy rating, six have given a Hold rating and one has assigned a Sell rating to the company's stock. According to MarketBeat.com, Hormel Foods has an average rating of "Hold" and an average target price of $25.71.

Hormel Foods Stock Performance

The company has a debt-to-equity ratio of 0.30, a current ratio of 1.88 and a quick ratio of 0.92. The firm has a market capitalization of $10.71 billion, a price-to-earnings ratio of 30.90, a PEG ratio of 2.34 and a beta of 0.30. The firm's fifty day moving average is $22.24 and its 200 day moving average is $22.71.

Hormel Foods (NYSE:HRL - Get Free Report) last released its quarterly earnings data on Wednesday, August 26th. The company reported $0.37 earnings per share for the quarter, beating the consensus estimate of $0.35 by $0.02. The firm had revenue of $2.96 billion for the quarter, compared to analyst estimates of $3.03 billion. Hormel Foods had a net margin of 2.82% and a return on equity of 9.91%. The company's revenue for the quarter was down 2.4% compared to the same quarter last year. During the same quarter in the prior year, the business earned $0.35 EPS. On average, analysts predict that Hormel Foods Corporation will post 1.48 EPS for the current fiscal year.

Hormel Foods Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Monday, November 16th. Investors of record on Tuesday, October 13th will be issued a dividend of $0.2925 per share. This represents a $1.17 annualized dividend and a dividend yield of 6.0%. The ex-dividend date is Tuesday, October 13th. Hormel Foods's dividend payout ratio (DPR) is currently 185.71%.

Insider Activity

In other news, Chairman William A. Newlands acquired 10,000 shares of Hormel Foods stock in a transaction that occurred on Monday, October 5th. The stock was purchased at an average price of $20.10 per share, with a total value of $201,000.00. Following the completion of the transaction, the chairman owned 76,375 shares in the company, valued at approximately $1,535,137.50. This trade represents a 15.07% increase in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through this hyperlink. Corporate insiders own 0.58% of the company's stock.

Institutional Inflows and Outflows

Several hedge funds have recently bought and sold shares of HRL. Raiffeisen Bank International AG raised its position in Hormel Foods by 90.7% during the second quarter. Raiffeisen Bank International AG now owns 986 shares of the company's stock valued at $26,000 after acquiring an additional 469 shares in the last quarter. Fiduciary Financial Advisors bought a new stake in Hormel Foods in the second quarter worth approximately $29,000. EverSource Wealth Advisors LLC increased its stake in shares of Hormel Foods by 57.5% during the 1st quarter. EverSource Wealth Advisors LLC now owns 1,455 shares of the company's stock worth $33,000 after purchasing an additional 531 shares during the last quarter. Root Financial Partners LLC increased its stake in shares of Hormel Foods by 149.2% during the 1st quarter. Root Financial Partners LLC now owns 1,495 shares of the company's stock worth $34,000 after purchasing an additional 895 shares during the last quarter. Finally, Global Retirement Partners LLC bought a new position in shares of Hormel Foods during the 2nd quarter valued at $37,000. 40.99% of the stock is owned by institutional investors and hedge funds.

Hormel Foods Company Profile

Hormel Foods Corporation is a global food company headquartered in Austin, Minnesota. Founded in 1891 by George A. Hormel, the company began as a meat processor and has expanded into a broad portfolio of branded food products sold through retail, foodservice and international channels.

Its products include refrigerated and shelf-stable meat, deli meats, bacon, pepperoni, sausages, canned foods, nut products and other prepared foods. Key brands include Hormel, SPAM, Jennie-O, Applegate, Columbus and Planters.

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