Narrow-moat Hormel provided an underwhelming margin outlook during its investor day last month that was further confirmed in its fiscal 2023 earnings release. Our changes led us to cut our fair value estimate to $31 per share, down from $37. Shares look fairly valued after considering our medium uncertainty rating for Hormel.
Hormel will reinvigorate Planters to regain the market share it hemorrhaged under previous ownership with its staunch focus on brand spending, boosting its ability to compete in the snack category.
Food is a competitive space (from other large manufacturers and smaller niche operators), and if Hormel ratchets back spending behind innovation and advertising, market share could erode.
|
Metric
|
HRL
|
TSN
|
KHC
|
|---|---|---|---|
Price/Earnings (Normalized) | 19.45 | 36.24 | 11.68 |
Price/Book Value | 2.21 | 0.95 | 0.88 |
Price/Sales | 1.42 | 0.32 | 1.61 |
Price/Cash Flow | 14.66 | 10.90 | 9.73 |
|
Metric
|
HRL
|
TSN
|
KHC
|
|---|---|---|---|
Quick Ratio | 0.64 | 0.47 | 0.40 |
Current Ratio | 1.40 | 1.34 | 1.00 |
Interest Coverage | 16.09 | −0.99 | 5.11 |
|
Metric
|
HRL
|
TSN
|
KHC
|
|---|---|---|---|
Return on Assets (Normalized) | 6.72% | 1.31% | 4.16% |
Return on Equity (Normalized) | 11.78% | 2.50% | 7.67% |
Return on Invested Capital (Normalized) | 8.51% | 2.81% | 6.42% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Economic Moat
|
Market Cap
|
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GIS
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K
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MKC
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LW
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CAG
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CPB
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