Hormel Foods Corporation
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Hormel Foods trades at $20.40, below both its 50-day ($21.53) and 200-day ($22.95) moving averages, after FY2025 (ended 26 Oct 2025) saw operating margin compress to 5.9% from 9.0% and diluted EPS fall 40.8% to $0.87.
Q3 FY2026 (ended 26 Jul) revenue declined 2.4% YoY with EPS of just $0.11, yet recent earnings surprises show three consecutive beats and a Zacks article notes adjusted operating margin expansion to 9% in the quarter, suggesting GAAP results are weighed by one-off charges. The P/E of 32.38x remains 118% above the peer median of 14.83x, a premium difficult to justify given the earnings deterioration, though Chairman Newlands' open-market purchase of 10,000 shares at $20.10 on 5 Oct and a near-52-week-low stock price provide a floor. Hold pending evidence that adjusted margin gains translate into sustained GAAP EPS recovery.
What could go wrong
- Valuation premium unwinds. P/E of 32.38x is 118% above the peer median of 14.83x; if margin recovery stalls, the multiple could compress sharply toward peers.
- Persistent margin compression. FY2025 gross margin fell to 15.6% from 17.0% and operating margin to 5.9% from 9.0%; if input costs or volume pressures persist, further erosion is likely.
- Revenue declines continue. Q3 FY2026 revenue fell 2.4% YoY to $2.96B, extending the soft top-line trend; sustained declines would undermine the turnaround narrative.
- Leverage risk. Total debt stood at $2.86B as of FY2025 with FCF declining to $534M from $1.01B; any acquisition integration costs could strain the balance sheet further.
What would change my mind
Where this comes from: FY25 fundamentals · Q3 FY26 results · peer comparison · insider trades. Orin's read on HRL; not advice.
How has the share price moved?
Down 12.1% over twelve months, from $23.74 on 27 Oct 2025 to $20.87 at the Tue 27 Oct 2026 close. Its highest close in that time was $26.51 on 26 Jun 2026; the last close is 21.3% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 38.9M, on 29 May 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All HRL filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| State Street | $642.0M | 0.0% |
| BlackRock | $489.1M | 0.0% |
| Vanguard Capital Management | $481.3M | 0.0% |
| Invesco | $376.6M | 0.0% |
| Vanguard Portfolio Management | $367.4M | 0.0% |
| Two Sigma Investments | $305.9M | 0.2% |
| Geode Capital Management | $202.8M | 0.0% |
| Morgan Stanley | $153.6M | 0.0% |
| Norges Bank | $141.6M | 0.0% |
| Goldman Sachs Group | $133.3M | 0.0% |
76 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 82 Form 4 filings; open-market trades net −$616K. Of the 50 on hand, 1 was an open-market purchase and 2 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about HRL
Orin answers questions about HRL from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 33.1× its last 12 months of profit (Tue 27 Oct close) — higher than in all 5 of its last 5 fiscal years (middle 25.2×); the typical Consumer Defensive company on the NYSE is at 21.9×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 33.1×above usual | 25.2× | 21.9× |
| P/S | 0.95×below usual | 1.45× | — |
| EV/EBITDA | 15.5×near usual | 15.2× | — |
| P/B | 1.5×below usual | 2.3× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $25 (from $23 to $28) — 20% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$25
$23 – $28 · +20% against the last close
- 2 buy or overweight
- 5 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 33.1× its last 12 months of profit; the middle P/E of the 3 companies it is compared to that made a profit is 33.4×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| HRLHormel Foods Corporation | $11B | 33.1× | 15.5× | 15.7% | 2.8% | 4% |
| CAGConagra Brands, Inc. | $7B | lost money | n/m | 23.8% | −17.0% | −26% |
| CPBCampbell Soup Company | $6B | 15.4× | 10.1× | 28.1% | 4.1% | 10% |
| KHCThe Kraft Heinz Company | $30B | lost money | n/m | 33.5% | −14.0% | −9% |
| SJMThe J. M. Smucker Company | $14B | 59.3× | 15.3× | 38.7% | 2.5% | 4% |
| TSNTyson Foods, Inc. | $20B | 33.4× | 10.3× | 6.1% | 1.0% | 3% |
- CAG, KHC: lost money over the last 12 months, so no P/E.
- CAG, KHC: EV/EBITDA is not meaningful (n/m) — its cash exceeds its market value plus debt, or the business lost money before depreciation.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 33.1× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now33.1×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Consumer Defensive companies on the NYSE were priced at a typical 21.9× their yearly profit (Tue 27 Oct close).
- Now21.9×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $27 a share — 30% above the $20.80 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $27 | 30% above $20.80 |
| Levered | $26 | 26% above $20.80 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.