Hormel Foods (NYSE:HRL) Shares Gap Down on Disappointing Earnings

Hormel Foods Co. (NYSE:HRL)’s stock price gapped down prior to trading on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $31.82, but opened at $31.02. Hormel Foods shares last traded at $31.70, with a volume of 771,216 shares trading hands.

The company reported $0.42 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.43 by ($0.01). Hormel Foods had a net margin of 6.52% and a return on equity of 11.03%. The business had revenue of $3.14 billion for the quarter, compared to the consensus estimate of $3.14 billion. During the same period in the previous year, the firm earned $0.42 EPS. The company’s revenue was down 1.9% compared to the same quarter last year.

Hormel Foods Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Tuesday, February 18th. Shareholders of record on Monday, January 13th will be given a dividend of $0.29 per share. The ex-dividend date of this dividend is Monday, January 13th. This represents a $1.16 annualized dividend and a yield of 3.53%. This is a boost from Hormel Foods’s previous quarterly dividend of $0.28. Hormel Foods’s dividend payout ratio is presently 79.58%.

Analysts Set New Price Targets

HRL has been the topic of a number of research reports. BNP Paribas started coverage on shares of Hormel Foods in a research note on Monday, October 21st. They set an “underperform” rating and a $28.00 target price on the stock. Stephens initiated coverage on shares of Hormel Foods in a research note on Thursday, October 3rd. They set an “equal weight” rating and a $31.00 price objective for the company. Finally, Citigroup decreased their price target on Hormel Foods from $36.00 to $35.00 and set a “buy” rating for the company in a research note on Tuesday, November 19th. Two equities research analysts have rated the stock with a sell rating, four have assigned a hold rating and one has given a buy rating to the company’s stock. According to data from MarketBeat, the stock presently has an average rating of “Hold” and a consensus price target of $31.29.

Insiders Place Their Bets

In other Hormel Foods news, EVP Deanna T. Brady sold 51,600 shares of the company’s stock in a transaction on Friday, September 13th. The shares were sold at an average price of $31.95, for a total value of $1,648,620.00. Following the sale, the executive vice president now directly owns 72,421 shares of the company’s stock, valued at approximately $2,313,850.95. This represents a 41.61 % decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, VP Steven J. Lykken sold 9,800 shares of the firm’s stock in a transaction that occurred on Friday, September 27th. The stock was sold at an average price of $31.91, for a total transaction of $312,718.00. Following the sale, the vice president now directly owns 30,589 shares in the company, valued at $976,094.99. The trade was a 24.26 % decrease in their position. The disclosure for this sale can be found here. Insiders have sold 71,400 shares of company stock worth $2,288,338 in the last ninety days. 0.69% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Several hedge funds have recently made changes to their positions in HRL. EverSource Wealth Advisors LLC boosted its stake in shares of Hormel Foods by 688.3% during the first quarter. EverSource Wealth Advisors LLC now owns 741 shares of the company’s stock valued at $26,000 after purchasing an additional 647 shares in the last quarter. Central Valley Advisors LLC purchased a new position in Hormel Foods in the second quarter worth $37,000. SG Americas Securities LLC increased its position in shares of Hormel Foods by 137.6% during the second quarter. SG Americas Securities LLC now owns 156,484 shares of the company’s stock worth $4,771,000 after purchasing an additional 90,621 shares in the last quarter. Diversify Advisory Services LLC lifted its holdings in shares of Hormel Foods by 33.5% during the 2nd quarter. Diversify Advisory Services LLC now owns 23,206 shares of the company’s stock valued at $697,000 after purchasing an additional 5,821 shares during the last quarter. Finally, Czech National Bank boosted its position in shares of Hormel Foods by 8.5% in the 2nd quarter. Czech National Bank now owns 55,314 shares of the company’s stock worth $1,687,000 after purchasing an additional 4,326 shares in the last quarter. 40.99% of the stock is owned by institutional investors.

Hormel Foods Trading Up 2.8 %

The company has a 50 day moving average of $31.08 and a two-hundred day moving average of $31.54. The stock has a market capitalization of $18.03 billion, a PE ratio of 23.15, a P/E/G ratio of 3.39 and a beta of 0.26. The company has a debt-to-equity ratio of 0.36, a quick ratio of 1.03 and a current ratio of 2.29.

About Hormel Foods

Hormel Foods Corporation develops, processes, and distributes various meat, nuts, and other food products to retail, foodservice, deli, and commercial customers in the United States and internationally. It operates through three segments: Retail, Foodservice, and International segments. The company provides various perishable products that include fresh meats, frozen items, refrigerated meal solutions, sausages, hams, guacamoles, and bacons; and shelf-stable products comprising canned luncheon meats, nut butters, snack nuts, chili, shelf-stable microwaveable meals, hash, stews, tortillas, salsas, tortilla chips, nutritional food supplements, and others.