Analyst Peter Galbo from Bank of America Securities reiterated a Sell rating on Hormel Foods (HRL – Research Report) and decreased the price target to $29.00 from $30.00.
Peter Galbo has given his Sell rating due to a combination of factors impacting Hormel Foods’ financial performance. The company is facing ongoing challenges in its Turkey supply chain and a slower recovery for its Planters brand, which have negatively affected its first-quarter results and are expected to continue into the second quarter. Despite Hormel’s confidence in meeting its full-year sales and profit goals, the shift in profit expectations to the latter half of the year increases execution risk.
Additionally, Hormel’s first-quarter adjusted earnings per share fell short of estimates, with sales gains in Retail and Foodservice segments being offset by profit declines. The company’s financial outlook for the year remains unchanged, but the timing of earnings improvements has been adjusted, with the second quarter expected to mirror the first. The challenges in achieving year-over-year profit growth across key segments, coupled with higher raw material costs and market softness in Brazil, contribute to the cautious outlook and the reiterated Underperform rating, with a lowered price objective of $29.
Galbo covers the Consumer Defensive sector, focusing on stocks such as Conagra Brands, General Mills, and The Hershey Company. According to TipRanks, Galbo has an average return of 0.2% and a 48.92% success rate on recommended stocks.