Hormel Earnings: Q2 Results Show Signs of Quick Turnaround, but Shares Look Fairly Valued

Following Hormel's weak first-quarter results, second-quarter earnings looked pretty good. Sequentially, sales were roughly flat, volume was up about 4% and gross margin remained steady at 16.5%, as management quickly addressed the issues that plagued the start of its fiscal 2023. This included reducing bloated inventory, rightsizing manufacturing to demand, and stabilizing Planters. We don't anticipate a change to our $37.50 fair value estimate for narrow-moat Hormel, but shares look fairly valued.