Shares of Hormel (HRL, Financial) fell 6.43% in the pre-market session after the company reported second-quarter earnings results.
Revenue missed analysts' expectations, and the full-year revenue guidance fell short of Wall Street's estimates. The lowered guidance reflects factors such as lower-than-expected commodity markets, production disruptions at its Suffolk, Virginia facility, and declines in its contract manufacturing business.
Hormel Foods Corp (HRL, Financial), trading on the NYSE, saw its price drop to $31.01. The company has a market capitalization of $17.00 billion and a P/E ratio of 22.15. Despite the dip, the company's GF Value of $44.05 suggests that it is significantly undervalued. You can explore more on Hormel's valuation on GF Value.
While there are warning signs related to Hormel’s gross margin decline, operating margin reduction, and asset growth outpacing revenue, there are also positives. The Altman Z-score of 3.74 indicates strong financial health, and the company is unlikely to be a manipulator, according to its Beneish M-Score of -2.78. Additionally, Hormel's stock dividend yield is close to a 10-year high at 3.62%, and recent insider buying activity reflects confidence from its leadership.
The firm sells its products through various channels, including US retail (64% of fiscal 2023 sales), US food service (30%), and international markets (6%). With major brands like Hormel, Spam, Jennie-O, Columbus, Applegate, Planters, and Skippy, many of these hold the number one or two market share in their respective categories.
Investors should weigh the growth potential and strong dividend yield against the challenges and lowered guidance. Hormel remains a slow-growth stock with a style box of Mid Value, offering a balanced mix of financial strength and yield. For more detailed analysis, visit the GF Value page.
