“Shares remain at a premium valuation, trading above even its packaged-food peers. Yet the execution is, as usual, near flawless. Our price target goes to $38, previously $25, based on 17.3x our FY14 EPS estimate – well above its protein peers Smithfield Foods (SFD* – BUY – $22.40) and Tyson Foods (TSN* – BUY – $23.38) trading at 6.3x and 9.2x 2014 EPS, respectively. So while we are concerned about the valuation gap to its protein peers and other packaged foods equities, we acknowledge the strong consistent growth Hormel has delivered. We are upgrading the shares to NEUTRAL, previously Underperform.,” DA Davidson’s analyst commented.
Shares of Hormel Foods traded down 0.27% during mid-day trading on Thursday, hitting $37.03. Hormel Foods has a one year low of $27.28 and a one year high of $37.14. The stock’s 50-day moving average is currently $35.20. The company has a market cap of $9.774 billion and a P/E ratio of 19.96.
Other equities research analysts have also recently issued reports about the stock. Analysts at Stephens reiterated an overweight rating on shares of Hormel Foods in a research note to investors on Tuesday, February 12th. They now have a $40.00 price target on the stock. Finally, analysts at Credit Agricole upgraded shares of Hormel Foods from an underperform rating to an outperform rating in a research note to investors on Friday, January 4th. They now have a $37.00 price target on the stock.
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