Jefferies analyst Akshay Jagdale assigned a Buy rating to Hormel Foods (NYSE: HRL) today and set a price target of $42. The company’s shares closed yesterday at $37.17, close to its 52-week high of $38.
Jagdale said:
“The 2Q results and outlook for Refrigerated Foods validated our materially less pessimistic view on commodity pork processor margins. But this was offset by sales declines in Muscle Milk and contract manufacturing as well as higher freight costs, all of which are transitory headwinds but likely to persist for the next few quarters. Reasons to own HRL: 1) strong management; 2) potential turn in turkey cycle; 3) 4) solid base business growth. We are updating our estimates. Our 2018 EPS estimate is decreasing from $1.87 to $1.82, which compares to management guidance of $1.81 to $1.95 (m/p $1.88) and consensus of $1.86. Our revised estimates primarily reflect the 2Q miss and lower EBIT margin assumptions (12.3% vs. 12.8% previously), partially offset by a lower tax rate assumption (now at 17.6% vs. 19.0% previously).”
According to TipRanks.com, Jagdale is a 4-star analyst with an average return of 5.2% and a 53.8% success rate. Jagdale covers the Consumer Goods sector, focusing on stocks such as Lamb Weston Holdings, McCormick & Company, and J & J Snack Foods.
Hormel Foods has an analyst consensus of Moderate Buy, with a price target consensus of $38.50.
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The company has a one-year high of $38 and a one-year low of $29.75. Currently, Hormel Foods has an average volume of 2.69M.
Based on the recent corporate insider activity of 53 insiders, corporate insider sentiment is negative on the stock.
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Hormel Foods Corp. engages in the production of meat and food products. It operates business through the following segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other.
