Hormel Foods Corporation (NYSE: HRL) experienced a notable increase in options trading on Thursday, with traders acquiring 5,653 call options. This figure marks an impressive rise of 84% compared to the average daily volume of 3,069 call options, indicating heightened investor interest in the company.
Institutional investors have also been active with Hormel Foods. Several hedge funds have adjusted their stakes in the company recently. For instance, Natixis Advisors LLC raised its holdings by 10.8% in the first quarter, accumulating a total of 77,072 shares valued at approximately $2.4 million. Similarly, PNC Financial Services Group Inc. increased its stake by 6.3%, now owning 72,121 shares worth around $2.2 million.
In addition, Jefferies Financial Group Inc. established a new position in Hormel Foods valued at about $494,000. Other notable moves include ING Groep NV, which boosted its stake by 34.9%, and iA Global Asset Management Inc., which purchased new shares worth $1.4 million. Overall, institutional investors and hedge funds collectively hold 40.99% of Hormel’s stock.
Market Analysts Weigh In on Growth Prospects
Recent research reports reflect a mix of opinions regarding Hormel Foods’ performance. Weiss Ratings reaffirmed a “sell (d+)” rating on the stock on October 8, 2023. Conversely, Piper Sandler adjusted its target price from $26.00 to $25.00, maintaining a “neutral” rating. Meanwhile, JPMorgan Chase & Co. lowered its price objective from $30.00 to $27.00, while still rating the stock as “overweight.”
The Goldman Sachs Group set a price objective of $27.00 and assigned a “buy” rating. Zacks Research, however, revised its rating from “hold” to “strong sell” on August 29, 2023. Currently, the consensus rating among analysts is “Hold” with a price target averaging $28.86.
Share Performance and Financial Metrics
During midday trading on Thursday, Hormel Foods saw its shares increase by 2.4%, climbing $0.57 to reach $23.84. The trading volume was recorded at 3,706,961 shares, slightly above the average of 3,672,685 shares. Currently, the company’s market capitalization stands at $13.11 billion, with a price-to-earnings (P/E) ratio of 17.38.
Hormel Foods recently reported its quarterly earnings on December 4, 2023, revealing earnings per share (EPS) of $0.32, slightly exceeding analysts’ expectations of $0.30. The company reported quarterly revenue of $3.19 billion, although it fell short of the consensus estimate of $3.24 billion. The firm recorded a net margin of 6.26% and a return on equity of 10.06%.
Looking ahead, Hormel Foods has set its fiscal year 2026 guidance at an EPS range of $1.43 to $1.51. Analysts forecast that the company will achieve an EPS of $1.65 for the current fiscal year.
Additionally, Hormel Foods announced a quarterly dividend of $0.2925, scheduled for payment on February 17, 2024. Shareholders on record as of January 12, 2024, will receive this dividend, which reflects an annualized basis increase to $1.17 and a dividend yield of 4.9%. This marks an increase from the previous quarterly dividend of $0.29, with a payout ratio currently at 85.40%.
Hormel Foods Corporation engages in the development, processing, and distribution of a diverse range of food products, including meat and nuts, to retail and commercial customers both in the United States and internationally. It operates through three primary segments: Retail, Foodservice, and International, providing a variety of perishable and shelf-stable products.
As investor interest continues to rise, Hormel Foods remains a focal point for market analysts and traders alike.
