Hormel Foods (HRL) Stock Forecast & Price Target

Hormel Foods has demonstrated steady growth in its retail portfolio, with a 0.9% year-over-year increase in sales driven by strong performance in major brands such as Spam and Applegate. The company’s food service segment is projected to grow with a volume increase of 3% and a pricing uptick of 1% year-over-year, indicating broad-based growth across various categories. Additionally, the consistent rise in market hog inventory, which amounted to 70.4 million head (up 0.7% year-over-year), suggests a stable supply chain environment that could support ongoing sales momentum.

Hormel Foods has experienced a decline in pork processing margins, with the average margin falling 38.5% year-over-year during F1Q25, signaling significant profitability challenges within its core meat-focused operations. Additionally, the company's retail operating margins have been adversely affected by persistent inflation in input costs and a shift in consumer demand towards lower-margin products, which has hindered its ability to mitigate rising expenses through price increases. Furthermore, lower farrowing intentions and a slight decrease in pork exports indicate ongoing weaknesses in market dynamics that could undermine future revenue growth.