Hormel (NYSE:HRL), perhaps best known for its Dinty Moore and Spam food lines, brought in an earnings report that matched and beat expectations on several fronts. The earnings wins gave the company a gain of 1.83% in premarket trading and a further increase going into this morning. While analysts urge caution—and have for quite some time—there are some signs that the canned food leader is poised to continue delivering solid results even with the pandemic in remission.
Hormel Earnings Report Delivers Wins
The Hormel earnings report led off by meeting expectations in earnings. The company brought in $0.42 per share in earnings, an exact match for the Zacks consensus of $0.42 per share. Interestingly, that $0.42 per share is also an exact match for this time last year. Given that the pandemic had really only started at the end of the period in question, this suggests the company is currently running at about pre-pandemic norms.
The company's revenue, meanwhile, fared slightly better. The company brought in $2.61 billion for the quarter against expectations of $2.42 billion via Zacks. That actually represents a record high in revenue for the company, which is up 8% against this time last year.
The company also posted guidance on its full-year operations, expecting earnings to fall within a range of $1.70 to $1.82 per share, and revenue to fall within the $10.2 billion to $10.8 billion range. While EPS guidance is holding steady from what it was, revenue was somewhat increased.
Jim Snee, who serves as company president, CEO, and chairman of the board noted that the record sales the company realized came from a combination of strong sales in the food service sector as well as continued strong demand in various retail channels, including deli sales and international operations. Snee also noted that the company had improved its supply chain performance as well, which is noteworthy due to the current inflationary behavior seen in the food sector right now.
Snee also pointed to gains realized from pre-pandemic planning, particularly in production of dry sausage and pizza toppings, supported by the company's plans to produce a donut with the help of the Doughnut Project known as “Cheese the Day”. It's a small pepperoni pizza using an unglazed donut for crust. Further gains will likely be seen as a result of Hormel's acquisition of the Planters brand back in February.
Is Hormel Stock a Good Buy? Consider the Analyst Perspective
Hormel's results proved solid, and based on our latest research on the financial analyst community, so too does their recommendation. For those wondering, is Hormel stock a good buy, Hormel has had a consensus rating of “hold” that goes back over two years. There doesn't seem to be much to shake that consensus up on the horizon.
A year ago, Hormel had eight “hold” ratings and one “sell” rating to its credit. Six months later, it lost the “sell” rating, and kept the eight “hold” ratings. Today, the “sell” rating is back, but four “hold” ratings have departed the field altogether, leaving us with four “hold” ratings and one “sell” rating.
Hormel share price targets, meanwhile, hold a fairly narrow range. The current average of $46.25 is supported by a high of $56 and a low of $40. So far, only one analyst has issued guidance of any sort on Hormel, with JPMorgan Chase & Co. issuing said guidance back in January. The company holds no rating on Hormel, but lowered the price target from $44 to that aforementioned low of $40. With Hormel shares currently trading at $48.41, there's some room for upside and downside potential afoot.
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