One-glance verdict
Undervalued
$33.44 our estimate vs market $25.75
Wall Street consensus: $26.88 (-19.6% lower than our fair-value estimate)
23% below our estimate, below the bear case
Fundamentals snapshot
Hormel Foods Corporation
HRL · NYQ · Consumer Defensive · Packaged Foods
Current price
$25.75
52-week range
$19.70 - $29.35
Market cap
$14.17B
Balance sheet
Healthy
11.47x Adequate
Net cash $324.26M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 3.8% last year.
- Reward Returns 5.8% on equity, ahead of 66% of its peers.
- Risk Stock trades 29.5% above its 5-year average P/E.
- Risk Insider ownership is only 0.5% (peer median: 2.6%).
What this company does
Hormel Foods Corporation
Hormel Foods makes and sells many popular grocery brands you likely know, like SPAM, Skippy peanut butter, Planters nuts, and Jennie-O turkey. The company earns most of its money selling these packaged foods to both retail stores and foodservice businesses (like restaurants and school cafeterias). Because its products are household staples, Hormel's sales tend to be more stable than other companies' during economic ups and downs.
How the company got here
Hormel Foods began in 1891 when George A. Hormel opened a meatpacking business in Austin, Minnesota. [2, 12] A major turning point was the invention of SPAM luncheon meat in 1937, which became famous as a staple for American troops during World War II. [1, 12] Over the decades, the company grew beyond just meatpacking by creating new products like Dinty Moore beef stew and acquiring other popular food companies. [1] Key acquisitions (when one company buys another) included Jennie-O turkey products in 1986 and, more recently, brands like Skippy peanut butter and Planters nuts. [1, 2] In 1993, the company officially changed its name from Geo. A. Hormel & Company to Hormel Foods Corporation to reflect its wider range of food products. [1]
What it actually does
Hormel makes many well-known packaged foods that you can find in almost any grocery store. [15] While it started with pork products, it now owns a wide variety of famous brands that people buy every day. [2] You might recognize its iconic SPAM canned meat, Skippy peanut butter, Planters nuts, Jennie-O turkey, Applegate organic meats, Hormel chili, and Wholly Guacamole. [6, 19] The company's products range from items for breakfast, like Black Label bacon, to lunch and dinner with products like Natural Choice deli meats and Dinty Moore stews. [1, 16]
Retail
This is Hormel's largest business segment, making up the majority of its sales. [7, 19] It involves selling products directly to grocery stores, supercenters, and other retail outlets where everyday shoppers buy their food. [13] When you buy a jar of Skippy peanut butter, a can of SPAM, or a package of Jennie-O turkey at your local supermarket, you are buying from Hormel's Retail business. [13] This segment is focused on building and marketing the well-known consumer brands that people trust and buy regularly. [19]
Foodservice
This segment sells Hormel's products to other businesses that prepare and serve food, rather than directly to shoppers. [13] Its customers include restaurants, schools, hospitals, and hotel chains. [11] For example, a restaurant might buy Hormel's bacon or pepperoni in large quantities to use on its menu, or a university cafeteria might serve its turkey products. [11] This is a significant part of the company, representing its second-largest source of revenue (the money a company brings in from sales). [18]
International
This part of the company focuses on selling Hormel's products outside of the United States. [4] It works to make popular brands like SPAM and Skippy just as well-known in other countries as they are in the U.S. [4] The company has a growing presence in places like China, Brazil, and across Europe, sometimes working with local partners to sell its food. [4] While it's the smallest of the three segments, growing its global business is a key part of the company's strategy. [18]
What management is betting on now
The company's leadership is focused on a few key strategies to help the business grow. [4, 13] They aim to expand their Foodservice business by selling more products to restaurants and other professional kitchens. [13] Management also wants to grow its snack food business, which includes popular brands like Planters nuts and Wholly Guacamole. [4] Another major priority is to increase sales in other countries, especially in Asia and Brazil. [4] To make the company more efficient, they are investing in technology and data analysis (the process of examining data to find useful information) to better understand customer preferences and streamline their supply chain (the entire process of making and selling goods, from getting the raw materials to delivering the final product to a store). [13]
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$152.51M
FY2024 Q4
$324.84M
FY2025 Q1
$237.04M
FY2025 Q2
$-18.64M
FY2025 Q3
$84.50M
FY2025 Q4
$231.45M
FY2026 Q1
$280.22M
FY2026 Q2
$96.77M
Revenue
—
Net income
$157.47M
Diluted EPS
0.29
Operating cash flow
$178.94M
Free cash flow
$96.77M
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Sources
Revenue
—
Net income
$181.80M
Diluted EPS
0.33
Operating cash flow
$349.21M
Free cash flow
$280.22M
Fetching…
Sources
Revenue
—
Net income
$-56.14M
Diluted EPS
-0.10
Operating cash flow
$322.91M
Free cash flow
$231.45M
Fetching…
Sources
Revenue
—
Net income
$183.74M
Diluted EPS
0.33
Operating cash flow
$156.70M
Free cash flow
$84.50M
Fetching…
Sources
Revenue
—
Net income
$180.02M
Diluted EPS
0.33
Operating cash flow
$56.44M
Free cash flow
$-18.64M
Fetching…
Sources
Revenue
—
Net income
$170.57M
Diluted EPS
0.31
Operating cash flow
$309.21M
Free cash flow
$237.04M
Fetching…
Sources
Revenue
—
Net income
$220.20M
Diluted EPS
0.41
Operating cash flow
$408.62M
Free cash flow
$324.84M
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Sources
Revenue
—
Net income
$176.70M
Diluted EPS
0.32
Operating cash flow
$217.99M
Free cash flow
$152.51M
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Sources
Is it cheap or expensive?
Fair value $33.44 vs current price $25.75
Wall Street consensus is the average analyst price target: $26.88 (-19.6% lower than our fair-value estimate).
Our most-likely fair value is $33.44 a share — about 29.9% above today's price of $25.75, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $324.3M - more cash than debt. Interest coverage 11.5x.
Net debt
$-324.26M
Interest coverage
11.47x
Hormel Foods Corporation's profit covers its interest bill about 11.5 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
HRL
BASELINE
Hormel Foods Corporation
Total debt $250.00M Interest coverage 11.47x This is the baseline the peer rows are being compared against.
Total debt $8.08B Interest coverage 3.21x -72% vs HRL Carries about 3.6x less debt cushion than HRL.
Total debt $7.48B Interest coverage 3.23x -72% vs HRL Carries about 3.6x less debt cushion than HRL.
Total debt $21.13B Interest coverage 4.90x -57% vs HRL Carries about 2.3x less debt cushion than HRL.
Total debt $7.34B Interest coverage 3.92x -66% vs HRL Carries about 2.9x less debt cushion than HRL.
Total debt $7.13B Interest coverage 3.52x -69% vs HRL Carries about 3.3x less debt cushion than HRL.
What you should know
The case for and against HRL
3 Rewards
2 Risks
Rewards
-
Revenue grew 3.8% last year.
-
Returns 5.8% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 29.5% above its 5-year average P/E.
-
Insider ownership is only 0.5% (peer median: 2.6%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
30.29x
Forward P/E
16.51x
P/B
1.78x
P/S
—
EV/EBITDA
11.20x
PEG ratio
1.83x
Profitability
How much profit each dollar creates
Gross margin
15.8%
Operating margin
11.1%
Net margin
3.8%
ROE
5.8%
ROA
4.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.04x
Current ratio
1.94x
Quick ratio
0.93x
Total debt
$250.00M
Total cash
$574.26M
Growth
How the business has been compounding
Revenue TTM
$9.51B
Revenue 5Y CAGR
1.2%
EPS TTM
0.85
EPS 5Y CAGR
-21.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.01B
Free CF TTM
$534.35M
FCF margin
5.6%
Dividend
Shareholder payout
Yield
4.5%
Payout ratio
137.1%
Last ex-div date
2026-07-13