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Investing.com - Piper Sandler maintained its Neutral rating and $33.00 price target on Hormel Foods (NYSE:HRL) stock, which currently trades at $30.35, following meetings with company executives. According to InvestingPro data, analyst targets range from $30 to $36, with a consensus recommendation leaning neutral at 2.75.
The investment firm recently hosted discussions with Hormel CEO Jim Snee and CFO Jacinth Smiley, gaining deeper insights into the food producer’s key business drivers. Piper Sandler noted that Hormel appears to be at an inflection point for EBIT growth after five consecutive quarters of declines. The company maintains strong financial health with a current ratio of 2.47 and has consistently raised its dividend for 32 consecutive years.
Previous earnings declines were attributed to higher spending, weak commodity turkey pricing, and distribution disruptions in the Planters business. The company has implemented a 30% capacity reduction in its turkey operations to reduce commodity exposure.
Hormel’s transformation and modernization program savings are expected to accelerate, which Piper Sandler believes could potentially drive results above current consensus estimates. The firm also highlighted that Planters has returned to full distribution following earlier disruptions.
The foodservice segment continues to show growth, an area where Piper Sandler views Hormel as having competitive advantages. Despite these positive developments, the firm maintained its Neutral stance on the stock.
In other recent news, Hormel Foods Corporation reported its second-quarter earnings for 2025, meeting earnings per share (EPS) expectations but slightly missing revenue forecasts. The company’s EPS was $0.35, aligning with analyst predictions, while revenue reached $2.9 billion, just below the anticipated $2.92 billion. Despite the revenue shortfall, Hormel Foods achieved a 1% organic increase in net sales, driven by strong performance in premium segments such as Applegate and Mexican foods. The company continues to lead in the ground turkey market, which remains a key area of growth. Looking ahead, Hormel Foods anticipates strong growth in the second half of the year, with a full-year net sales growth forecast of 2-3% and adjusted EPS projected between $1.58 and $1.68. The company plans to increase advertising investments and expects significant contributions from its Turkey portfolio and Planters brand. Additionally, Hormel Foods remains committed to its Transform and Modernize initiative, which aims to restore historical earnings growth.
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