Hormel Foods Price Target Raised to $27 as Retail Volumes Fall 6%
Stephens raised its price target on Hormel Foods by $2 to $27 while maintaining an Equal Weight rating, citing Foodservice strength but waiting for clearer retail margin improvement. The company reported Q1 retail volumes down 6% year-over-year and reaffirmed full-year net sales guidance of $12.2-12.5 billion and 2026 adjusted EPS of $1.43-1.51.
1. Stephens Raises Price Target
Stephens raised its price target on Hormel Foods to $27 from $25 while maintaining an Equal Weight rating. The firm cited strength in the Foodservice segment but emphasized the need for clearer retail margin improvement before adopting a more bullish stance.
2. Q1 Retail Performance
Retail volumes in the first quarter declined 6% year-over-year, compared with a 4% drop a year earlier. The downturn reflected shifts toward lower-priced alternatives, tariff-driven commodity cost pressures and the exit from certain non-core private-label snack nut offerings.
3. Full-Year Guidance Reaffirmed
Hormel reaffirmed its full-year net sales outlook at $12.2 billion to $12.5 billion, in line with consensus expectations, and projected 2026 adjusted EPS between $1.43 and $1.51. The guidance closely aligns with analyst estimates near $1.47 per share.
4. Turkey Business Sale Impact
The sale of its whole-bird turkey business is expected to reduce fiscal 2026 net sales by about $50 million, with only a minimal effect on adjusted earnings per share.