Hormel Foods Corp.: Rare GM upside drives shares higher

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Hormel Foods Corp.: Rare GM upside drives shares higher

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Hormel Foods Corp.

Rare GM upside drives shares higher

Reiterate Rating: NEUTRAL | PO: 25.00 USD | Price: 23.59 USD

2Q26 adj EPS beat on gross margin upside vs BofAe 28 May 2026

HRL reported 2Q26 adj. EPS of $0.40 (vs. Street $0.35), driven by positive surprise gross Equity

margin upside, which drove shares higher today. Profitability exceeded expectations across

all segments, supported by pricing flow-through and improved manufacturing performance,

Key Changesparticularly across the turkey network. HRL reaffirmed FY26 guidance (sales of $12.2–

$12.5bn; adj. EPS of $1.43–$1.51) and indicated it is trending toward the upper half of the (US$) Previous Current

EPS range. Given cautious investor positioning into the print, the stock reaction was largely Price Obj. 23.00 25.00

relief-driven (no guide cut) alongside improving confidence in underlying execution. We 2026E Rev (m) 12,302.1 12,294.1

reiterate our Neutral rating and raise our PO to $25 (from $23), now based on 16x CY27E 2027E Rev (m) 12,385.6 12,377.4

EPS (prior 15x) on our higher estimates and improved earnings visibility. 2028E Rev (m) 12,665.1 12,656.3

2026E EPS 1.44 1.49

2027E EPS 1.50 1.56Improved supply chain execution – durable vs. one-time?

Execution improved in 2Q, with supply chain productivity and manufacturing gains more 2028E EPS 1.60 1.66

than offsetting logistics pressure. Better turkey performance (favorable conditions +

higher throughput after reworked plant network over last several years) drove margin Peter T. Galbo, CFA

Research Analyst

upside across Retail and Foodservice. While logistics and fuel remained headwinds, BofAS

execution improved vs. expectations, and the impact was less severe than expected.