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Investing.com - Goldman Sachs initiated coverage on Hormel Foods (NYSE:HRL) with a Buy rating and a price target of $35 on Monday. The company, with a market capitalization of $10.77 billion, has shown resilient performance with a 2.4% revenue growth over the last twelve months.
The investment bank cited Hormel’s strong packaged food portfolio with diverse brands, price points, and occasions across key protein categories as primary factors behind the positive outlook. According to InvestingPro data, the company currently trades at an EV/EBITDA multiple of 5.21x, significantly below the levels cited by Goldman Sachs.
Goldman Sachs forecasts an improving earnings trajectory for the food company, driven by the recovery of its Planters business, stabilization in the turkey supply backdrop, and ongoing cost savings initiatives. InvestingPro analysis shows the company maintains a "GREAT" financial health score of 3.37, supporting the positive outlook.
The firm believes current FactSet consensus estimates underestimate Hormel’s ability to reaccelerate growth into fiscal year 2026, presenting an opportunity for investors.
Goldman Sachs also noted Hormel’s valuation appears attractive at 12.3 times next-twelve-months EV/EBITDA, which sits below its one-year, three-year, and five-year averages of 13.0, 14.6, and 15.8 times, respectively.
In other recent news, Pilgrim’s Pride (NASDAQ:PPC) Corp reported its first-quarter 2025 earnings, which fell short of analyst expectations for both earnings per share (EPS) and revenue. The company announced an EPS of $1.31, which was below the forecasted $1.36, and reported revenue of $4.5 billion, missing the anticipated $4.53 billion. Despite the earnings miss, Pilgrim’s Pride saw a 62% year-over-year increase in Adjusted EBITDA, reaching $533.2 million, indicating strong growth in several areas. The company’s revenue increased by 2.3% to $4.46 billion, driven by product innovation and expansion in the U.S. and European markets. However, operational challenges such as bird mortality were highlighted as ongoing issues. Looking ahead, Pilgrim’s Pride plans to invest in capacity expansion in Mexico and the U.S., with a full-year capital expenditure estimate of approximately $750 million. Analyst firms have not yet provided updates on stock ratings following the earnings report. Despite these challenges, the company remains focused on growth strategies, including geographic expansion and product innovation.
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