Overview

• U.S. branded food maker's fiscal Q2 sales slightly beat analyst expectations, adjusted EPS beat

• Company completed sale of whole-bird turkey business, shifting focus to value-added protein

• Hormel reaffirmed full-year sales and adjusted EPS guidance, updated reported EPS outlook

Outlook

• Hormel Foods reaffirms fiscal 2026 net sales guidance of $12.2 bln to $12.5 bln

• Company updates fiscal 2026 diluted EPS guidance to $1.28-$1.37 from $1.37-$1.46

• Hormel Foods expects minimal impact to adj EPS from turkey business divestiture

Result Drivers

• BROAD-BASED SEGMENT GROWTH - All segments delivered net sales and segment profit growth, reflecting strength across the business, per President John Ghingo

• BRANDED AND VALUE-ADDED PRODUCTS - Growth driven by strong performance in Jennie-O ground turkey, Applegate meats, Hormel Black Label bacon, Herdez portfolio, Hormel Gatherings trays, and branded products in Foodservice

• EXPORT AND CHINA BUSINESS - International segment growth driven by strong SPAM exports and in-country China business

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the food processing peer group is "buy."

• Wall Street's median 12-month price target for Hormel Foods Corp is $25.00, about 19.3% above its May 27 closing price of $20.96

• The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 16 three months ago

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