HRL's Stock Performance: Is Hormel Foods Falling Short Compared to the Consumer Defensive Category?
Let's dive into Hormel Foods Corporation (HRL), the $16.6 billion giant in the food industry. Based in Austin, Minnesota, this powerhouse manufactures and markets a tantalizing array of meat and food products under more than 30 well-known brands, such as SPAMTM, SKIPPYTM, PlantersTM, and Jennie-OTM.
.HRL typically falls under the "large-cap" stocks category due to its hefty market cap. Its products satisfy a vast customer base worldwide, ranging from foodservice providers to convenience stores and commercial retailers alike.
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Shares of Hormel Foods have witnessed a 1.3% uptick over the last three months. However, they've slightly underperformed the Consumer Staples Select Sector SPDR Fund (XLP) during the same period. Longer-term performance paints a picture of a 4.2% YTD loss for HRL, trailing XLP's 2.3% rise. The stock has been hovering below its 200-day moving average since last year.
On May 29, shares of Hormel Foods saw a 1.1% rise after the company announced Q2 2025 earnings, meeting Wall Street expectations. Despite a 7% decline in sales volumes due to supply chain challenges, investors remained optimistic, boosted by the reaffirmed annual organic net sales growth outlook of 2% to 3%. The company also narrowed its full-year adjusted EPS forecast.
Meanwhile, rival The Kraft Heinz Company (KHC) hasn't kept pace, with a 21.1% drop over the past 52 weeks and a 16.2% decline on a YTD basis.
Analysts maintain a moderately optimistic outlook for Hormel Foods. As of writing, the stock holds a consensus rating of "Moderate Buy" from nine analysts, with a mean price target of $32.71, though falling below this figure currently.
Despite underperforming the sector somewhat over the past year, Hormel Foods is trading at an approximately 18x to 21.8x P/E ratio, depending on the source, making it a reasonably priced investment choice with growth potential. Unfortunately, I couldn't find the P/E ratio for The Kraft Heinz Company (KHC) in the given sources.
In the realm of finance and investing, Hormel Foods Corporation (HRL) is a noteworthy choice, especially for those interested in the consumer staples sector, given its large-cap status and diverse business portfolio. The stock, although showing a slight underperformance against XLP in the recent period, offers growth potential, trading at a reasonable P/E ratio, making it a reasonably priced investment choice.
