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

Hormel Foods Co. (NYSE:HRL) shares 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.

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

Hormel Foods Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Tuesday, February 18th. Stockholders of record on Monday, January 13th will be paid a dividend of $0.29 per share. The ex-dividend date of this dividend is Monday, January 13th. This is an increase from Hormel Foods’s previous quarterly dividend of $0.28. This represents a $1.16 annualized dividend and a dividend yield of 3.68%. Hormel Foods’s dividend payout ratio (DPR) is currently 79.58%.

Analyst Upgrades and Downgrades

A number of brokerages have weighed in on HRL. Stephens began coverage on 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. Citigroup decreased their price target on shares of Hormel Foods from $36.00 to $35.00 and set a “buy” rating for the company in a research report on Tuesday, November 19th. Finally, BNP Paribas assumed coverage on shares of Hormel Foods in a research note on Monday, October 21st. They issued an “underperform” rating and a $28.00 price target for the company. Two research analysts have rated the stock with a sell rating, four have assigned a hold rating and one has assigned a buy rating to the company’s stock. According to MarketBeat, the company presently has an average rating of “Hold” and a consensus price target of $31.29.

Insider Activity

In other news, EVP Deanna T. Brady sold 51,600 shares of the firm’s stock in a transaction dated 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 transaction, the executive vice president now directly owns 72,421 shares in the company, valued at approximately $2,313,850.95. This trade represents a 41.61 % decrease in their position. The transaction was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, SVP Kevin L. Myers sold 10,000 shares of the business’s stock in a transaction dated Wednesday, September 18th. The shares were sold at an average price of $32.70, for a total transaction of $327,000.00. Following the sale, the senior vice president now directly owns 39,050 shares of the company’s stock, valued at approximately $1,276,935. This represents a 20.39 % decrease in their position. The disclosure for this sale can be found here. In the last ninety days, insiders sold 71,400 shares of company stock worth $2,288,338. 0.69% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Franklin Resources Inc. boosted its stake in Hormel Foods by 3.4% during the 3rd quarter. Franklin Resources Inc. now owns 50,526 shares of the company’s stock valued at $1,578,000 after purchasing an additional 1,651 shares during the period. Peapack Gladstone Financial Corp bought a new stake in shares of Hormel Foods during the third quarter valued at approximately $222,000. Tudor Financial Inc. acquired a new position in shares of Hormel Foods during the third quarter worth approximately $1,060,000. McIlrath & Eck LLC grew its holdings in Hormel Foods by 47.5% in the 3rd quarter. McIlrath & Eck LLC now owns 1,981 shares of the company’s stock worth $63,000 after buying an additional 638 shares in the last quarter. Finally, Toronto Dominion Bank increased its position in Hormel Foods by 8.8% in the 3rd quarter. Toronto Dominion Bank now owns 155,200 shares of the company’s stock valued at $4,920,000 after acquiring an additional 12,596 shares during the period. Institutional investors and hedge funds own 40.99% of the company’s stock.

Hormel Foods Stock Down 0.8 %

The company has a debt-to-equity ratio of 0.36, a quick ratio of 1.03 and a current ratio of 2.29. The firm has a 50 day simple moving average of $31.03 and a two-hundred day simple moving average of $31.52. The stock has a market cap of $17.30 billion, a P/E ratio of 22.32, a P/E/G ratio of 3.42 and a beta of 0.26.

Hormel Foods Company Profile

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.