Hormel Foods Corporation (NYSE: HRL) experienced a significant uptick in options trading on Thursday, with traders acquiring 5,653 call options. This figure marks an impressive increase of 84% compared to the average daily volume of 3,069 call options, indicating heightened interest in the stock.
Institutional Investors Adjust Holdings
Recent activity from institutional investors reflects a strategic shift concerning Hormel Foods. Notably, Natixis Advisors LLC increased its stake in the company by 10.8% during the first quarter, now holding 77,072 shares valued at approximately $2.4 million after purchasing an additional 7,534 shares.
Other significant movements include Jefferies Financial Group Inc., which acquired a new stake worth around $494,000. PNC Financial Services Group Inc. expanded its holdings in Hormel Foods by 6.3%, bringing its total to 72,121 shares valued at $2.2 million. Similarly, ING Groep NV raised its stake by 34.9%, now owning 50,069 shares valued at $1.5 million. iA Global Asset Management Inc. also entered the scene with a new investment valued at $1.4 million. Collectively, institutional investors and hedge funds own about 40.99% of Hormel Foods’ stock.
Analysts Weigh In on Hormel Foods
Wall Street analysts have been closely monitoring Hormel Foods, issuing various ratings based on recent performance trends. Weiss Ratings reaffirmed a “sell (d+)” rating on October 8, while Piper Sandler reduced their target price from $26.00 to $25.00 with a “neutral” rating.
In a separate note, JPMorgan Chase & Co. lowered its price objective from $30.00 to $27.00, maintaining an “overweight” rating. The Goldman Sachs Group set a price target of $27.00 and labeled the stock as a “buy.” Conversely, Zacks Research downgraded Hormel Foods from a “hold” to a “strong sell” rating. Currently, three analysts have a buy rating, five have assigned a hold rating, and two analysts have issued a sell rating, leading to a consensus rating of “hold” with a price target of $28.86 according to MarketBeat.com.
As of Thursday, Hormel Foods shares traded up 2.4%, reaching $23.84. The company recorded a trading volume of 3,706,961 shares, slightly higher than its average volume of 3,672,685. Hormel Foods has a market capitalization of $13.11 billion, a price-to-earnings (P/E) ratio of 17.38, and a beta of 0.33. Over the past year, the stock has fluctuated between a low of $21.03 and a high of $33.80.
Financial Performance and Dividend Announcement
Hormel Foods recently reported quarterly earnings on December 4, 2023, revealing earnings per share (EPS) of $0.32, surpassing analysts’ consensus estimate of $0.30 by $0.02. The firm reported revenues of $3.19 billion, which fell short of the consensus estimate of $3.24 billion. The company achieved a return on equity of 10.06% and a net margin of 6.26%, with quarterly revenue up 1.5% year-over-year.
Looking ahead, Hormel Foods has set its fiscal year 2026 guidance at an EPS range of $1.430 to $1.51. Analysts project the company will post an EPS of $1.65 for the current fiscal year.
Additionally, Hormel Foods has announced an increase in its quarterly dividend to be paid on February 17, 2024. Shareholders of record as of January 12, 2024, will receive a dividend of $0.2925, up from the previous quarterly rate of $0.29. This results in an annualized dividend of $1.17 and a yield of 4.9%, with a payout ratio currently standing at 85.40%.
Hormel Foods Corporation is engaged in the development, processing, and distribution of a variety of food products, including meat and nuts. Operating through three segments—Retail, Foodservice, and International—the company provides a wide range of perishable and shelf-stable products, serving both retail and commercial customers in the United States and internationally.
