In a report released today, Peter Galbo from Bank of America Securities reiterated a Sell rating on Hormel Foods (HRL – Research Report), with a price target of $33.00.
Peter T. Galbo’s Sell rating for Hormel Foods (HRL) is based on a multitude of factors. He highlights that Hormel’s recovery plan is heavily reliant on the FY26 targets, with FY24 serving as an investment year. Despite the company’s ambitious target of $250 million in operating income growth by FY26, Galbo points out that this requires significant ramping up, which brings in an element of uncertainty. Furthermore, he notes a lowering in Hormel’s FY24 to FY25 estimated earnings per share, which might be considered a red flag for investors.
In addition, Galbo draws attention to the company’s realignment of resources towards three strategic brand pillars within the retail segment. However, he expresses concern over the multiple compression across center-store peers, which is reflected in his lowering of the price objective for Hormel from $39 to $33. This, coupled with the potential risks associated with achieving Hormel’s FY26 targets, contributes to his underperform rating for the company’s stock. This careful evaluation of Hormel’s strategic plans, financial outlook, and the prevailing market conditions forms the basis for Galbo’s Sell recommendation.
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Based on the recent corporate insider activity of 66 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of HRL in relation to earlier this year.
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Hormel Foods (HRL) Company Description:
Founded in 1891, Hormel Foods Corp. is a Minnesota-based food company, which produces and markets various meat and food products to retail, food service, deli, and commercial customers. It operates through the following four segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other.
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