Hormel Foods: Buy, Sell, or Hold?
Hormel Foods (NYSE: HRL) owns a collection of iconic food brands. But owning great brands isn't enough to make a company's stock worth buying -- the business has to put up good financial results, too. That is why Wall Street has been so negative on Hormel since the stock hit a high-water mark in 2022. Simply put, Hormel has stumbled in recent years. But this story looks like it is about to change for the better. Here's a look at the buy, sell, and hold continuum for Hormel, starting with the negative point of view and working to the positive.
Starting with the bad news, Hormel's earnings were pretty dismal in 2023. You know it was bad because the company just listed the key numbers without comparing them to the prior year. To summarize, adjusted sales fell 2.8%, volume was off 4.2%, gross profit declined 7.6%, and earnings per share fell 11.4%. It was not the best year for Hormel.
The stock reacted pretty much as you would expect, with the shares dropping over 33% from their early-2022 highs. And the problems it faced are, well, still a work in progress. For example, Hormel hasn't been as successful at passing rising costs on to consumers. The turkey business continues to face headwinds from avian flu. The company bought Planters just as the nuts business was hitting a weak patch. And consumers in China haven't yet returned to pre-COVID lockdown buying patterns.
Source Fool.com
