- Price
- $20.40
- Fair value
- $26.50
- Discount
- 23.0%
- Uncertainty
- Medium
- LSEG rating
- 2.73
- Moat
- Narrow
- Next earnings
- 2026-11-27
- Next earnings is estimate
- Yes
- Company name
- Hormel Foods
- Sector
- Packaged foods
- About
- Hormel Foods makes branded meat and food products. Its brands include SPAM, Hormel, Jennie-O, Applegate, Planters, Skippy, Hormel Natural Choice, Hormel chili and Austin Blues. It reports three segments. Retail sells to grocery stores, mass merchants and other retailers. Foodservice sells prepared proteins, pepperoni, turkey and other products to restaurants and other food service operators, and its organic net sales grew for 12 quarters in a row to Q3 fiscal 2026. International exports products and makes and sells them in other countries, and it has minority investments in other food companies. Net sales were $2.96 billion in Q3 fiscal 2026. Its fiscal year ends in late October. In September 2026, Hormel agreed to buy Brakebush, a value-added chicken company, for about $1.055 billion.
- Thesis
- The market prices Hormel for falling volume in its Retail segment and for years of weak profit growth and leadership changes. In Q3 fiscal 2026, Retail volume fell 9% and its organic net sales fell 3%, because of lower sales of commodity turkey and private label snack nuts. Hormel cut its fiscal 2026 net sales guidance to $12.1 billion to $12.2 billion. It had an interim CEO from mid-2025, and a new CEO, John Ghingo, starts on October 26, 2026, with a new CFO since September 8, 2026. The market also has doubts about the $1.055 billion purchase of Brakebush, which adds debt and is not expected to add to adjusted EPS before fiscal 2028. For the gap to close, three things must be true. Adjusted EPS must reach the raised fiscal 2026 range of $1.45 to $1.51, and the fiscal 2027 outlook must show more growth. Retail volume must stop falling, with growth in priority brands such as SPAM, Applegate and Planters. The Brakebush purchase must close in Q1 fiscal 2027 and add to Foodservice growth without a large rise in debt. The Q4 fiscal 2026 report with the fiscal 2027 outlook, expected in late November or early December 2026, is the main test, and the first quarters under the new CEO give more evidence. If they pass, the gap can close over the next four to six quarters. The main reason it may not close is weak consumer demand that keeps Retail volume and margins low.
- Risks
- Retail volume fell 9% in Q3 fiscal 2026. Consumers are under pressure, and sales of commodity turkey and private label snack nuts fell. If volume keeps falling, Retail profit can fall further.
Hormel has a new CEO from October 26, 2026, and a new CFO from September 8, 2026, after an interim CEO. A new team can change the strategy, the brand portfolio or the use of cash.
The Brakebush purchase of about $1.055 billion needs regulatory approval and integration. Hormel expects it to add to adjusted EPS only from fiscal 2028, and it can add debt.
Hormel buys hogs, pork, turkey and other inputs. Changes in commodity prices and animal disease can raise costs or lower prices on commodity products.
- Balance sheet
- Cash: $840M
Debt: $2.9B
Net debt: $2.0B
Debt due within 12 months: $506M
Last debt due: 2051
Hormel funds itself with senior unsecured notes and has low debt. Debt is the long-term debt of $2,855 million at July 26, 2026, including the current portion of $506 million. The current portion is mostly the $500 million of 4.800% notes due March 2027. Other notes are $750 million at 1.700% due June 2028, $1.0 billion at 1.800% due June 2030 and $600 million at 3.050% due June 2051. Cash, excluding assets held for sale, was $840 million. Hormel has an unsecured revolving credit facility of $750 million, with an option to add $375 million. In Q3 fiscal 2026, cash from operations was $241 million, capital expenditures were $68 million, depreciation and amortization was $66 million and dividends were $161 million. Total assets were $13.3 billion. The Brakebush purchase of about $1.055 billion in cash is expected to close in Q1 fiscal 2027 and will raise net debt.
As of 2026-07-26.
- Checkpoints
- Nov 27, 2026 (estimate): Q4 fiscal 2026 results and the fiscal 2027 outlook. Pending. Watch: Adjusted EPS within $1.45 to $1.51 for fiscal 2026 and a fiscal 2027 outlook with growth in adjusted EPS pass; a miss or a lower 2027 outlook fails.
Jan 2027 (estimate): Brakebush purchase closes. Pending. Watch: Closing in Q1 fiscal 2027 at about $1.055 billion with no large new conditions passes; a delay past March 29, 2027, or new conditions from regulators fails.
Feb 2027 (estimate): Q1 fiscal 2027: first quarter under the new CEO. Pending. Watch: Retail volume that falls less than in fiscal 2026 and Foodservice growth that continues pass; another large fall in Retail volume fails.
- Recent events
- 2026-09-30: Hormel agreed to buy Brakebush Brothers, a value-added chicken company in Wisconsin, for about $1.055 billion in cash. Brakebush had about $1.2 billion of net sales in the last 12 months and has five production plants. Hormel expects to close the purchase in Q1 fiscal 2027, after regulatory approvals, to report it mostly in Foodservice, and to see it add to adjusted EPS from fiscal 2028.
2026-08-27: Hormel reported Q3 fiscal 2026 results. Net sales were $2.96 billion and organic net sales fell 2%. Diluted EPS was $0.11 and adjusted EPS was $0.37. The quarter had a $56 million loss on the Brazil sale, a $48 million impairment of a minority investment in Indonesia and a $38 million litigation settlement. Hormel raised its fiscal 2026 adjusted EPS guidance to $1.45 to $1.51, but it cut its net sales guidance to $12.1 billion to $12.2 billion.
2026-08-24: Hormel named Ash Bhumbla as Executive Vice President and CFO from September 8, 2026. He was CFO of the Chicken segment of Tyson Foods.
2026-07-27: The board appointed John Ghingo, Hormel's President, as President and CEO from October 26, 2026. Jeff Ettinger's service as interim CEO ends on October 25, 2026.