Hormel Foods Corporation
) scaled a new 52-week high of $50.75 during its trading session on
Aug 28. The new apex represents a slight increase over the previous
high of $50.73 reached on Aug 21, 2014.
Hormel Foods closed the session at $50.65, reflecting a
year-to-date return of 13.6%. The trading volume for the session
was roughly 0.59 million shares. Earnings estimate revisions for
fiscal years 2014 and 2015 as well as an expected earnings growth
rate of 8% for the next five years, indicate further upward
potential for this meat products company.
Hormel Foods' solid results for third-quarter fiscal 2014 (ended
Jul 27, 2014) have strengthened investors' confidence regarding its
financial position. While the share price has risen by 5.8% since
Aug 21, earnings estimates have also witnessed an upward revision.
A brief snapshot of the quarterly result will justify the market's
Earnings grew 21% to 51 cents per share driven by improved top-line
and margin performance. Revenues came in at $2.3 billion,
increasing 5.8% year over year. Of the segments, growth in
Refrigerated Foods, Jennie-O Turkey Store and International &
Other segments were partially offset by a decline in Grocery
Products and Specialty Foods segments.
For fiscal 2014, Hormel Foods anticipates improved results from the
Jennie-O Turkey Store, International & Other and Specialty
Foods segments. SKIPPY peanut butter items and Hormel Rev snack
wraps are also expected to gain momentum. Earnings are guided in
the range of $2.17 to $2.27 per share.
In addition, the recently acquired assets of CytoSport Holdings,
Inc., the renowned Muscle Milk producer, will add $370 million to
the company's revenue generation capacity. The acquisition is
expected to be accretive to fiscal 2015 earnings per share.
Estimate Revisions Show Potency
Over the last 30 days, the Zacks Consensus Estimate for Hormel
Foods has climbed 1.8% to $2.23 for fiscal 2014, and 1.2% to $2.57
for fiscal 2015. These estimates reflect year-over-year growth of
14.4% for fiscal 2014 and 15.4% for fiscal 2015.
With a market capitalization of $13.4 billion, Hormel Foods
currently carries a Zacks Rank #2 (Buy). Some other stocks worth
considering in the food industry include Pilgrim's Pride
), Sanderson Farms, Inc. (
) and Treehouse Foods, Inc. (
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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HORMEL FOODS CP (HRL): Free Stock Analysis
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