There is no way Hormel Foods Corporation (HRL) can keep these numbers up

Hormel Foods Corporation (NYSE: HRL) stock jumped 1.03% on Friday to $47.05 against a previous-day closing price of $46.57. With 1.55 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.44 million shares. During the session, the Packaged Foods company that operates in wider Consumer Defensive sector, reached to the highest price of $47.28 whereas the lowest price it dropped to was $46.58. The 52-week range on HRL shows that it touched its highest point at $55.11 and its lowest point at $40.48 during that stretch. It currently has a 1-year price target of $46.44. With its current market cap of 25.79 billion, HRL has annualized dividend of $1.04 while the current yield stands at 2.21%. Beta for the stock currently stands at 0.12.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of HRL was up-trending over the past week, with a rise of 2.39%, but this was down by -8.23% over a month. Three-month performance surged to 1.60% while six-month performance fell -5.77%. The stock gained 15.21% in the past year, while it has lost -3.61% so far this year. A look at the trailing 12-month EPS for HRL yields 1.83 with Next year EPS estimates of 2.02. For the next quarter, that number is 0.50. This implies an EPS growth rate of -0.10% for this year and 10.92% for next year. EPS is expected to grow by 8.75% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 0.20%.

Float and Shares Shorts:

At present, 546.08 million HRL shares are outstanding with a float of 287.19 million shares on hand for trading. On Jul 14, 2022, short shares totaled 10.85 million, which was 1.99% higher than short shares on Jun 14, 2022. In addition to Mr. James P. Snee as the firm’s Chairman, Pres & CEO, Ms. Jacinth C. Smiley serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 41.59% of HRL’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 48.91% of HRL, in contrast to 25.04% held by mutual funds. Shares owned by individuals account for 15.76%. As the largest shareholder in HRL with 6.06% of the stake, The Vanguard Group, Inc. holds 33,109,723 shares worth 33,109,723. A second-largest stockholder of HRL, SSgA Funds Management, Inc., holds 27,000,994 shares, controlling over 4.95% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in HRL, holding 20,137,874 shares or 3.69% stake. With a 1.72% stake in HRL, the Washington Mutual Investors Fund is the largest stakeholder. A total of 9,400,000 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 1.48% of HRL stock, is the second-largest Mutual Fund holder. It holds 8,084,323 shares valued at 406.48 million. Vanguard 500 Index Fund holds 1.16% of the stake in HRL, owning 6,324,485 shares worth 318.0 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for HRL since 12 analysts follow the stock currently. There are 1 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 9 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With HRL analysts setting a high price target of $52.00 and a low target of $40.00, the average target price over the next 12 months is $46.44. Based on these targets, HRL could surge 10.52% to reach the target high and fall by -14.98% to reach the target low. Reaching the average price target will result in a decline of -1.3% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. HRL will report FY 2022 earnings on 11/22/2022. Analysts have provided yearly estimates in a range of $1.92 being high and $1.80 being low. For HRL, this leads to a yearly average estimate of $1.82. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Hormel Foods Corporation surprised analysts by -$0.01 when it reported $0.40 EPS against a consensus estimate of $0.41. The surprise factor in the prior quarter was $0.01. Based on analyst estimates, the high estimate for the next quarter is $0.51 and the low estimate is $0.48. The average estimate for the next quarter is thus $0.50.

Summary of Insider Activity:

Insiders traded HRL stock several times over the past three months with 1 Buys and 1 Sells. In these transactions, 6,600 shares were bought while 2,110 shares were sold. The number of buy transactions has increased to 54 while that of sell transactions has risen to 18 over the past year. The total number of shares bought during that period was 1,521,872 while 188,909 shares were sold.

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