Hormel Earnings: Shares Once Again Fall to Our Fair Value Estimate Amid Top-Line Headwinds

As was the case after the previous earnings release, shares were down a high-single-digit percentage on narrow-moat Hormel's fiscal third-quarter results. With just one quarter left in the current fiscal year, the company downgraded its full-year guidance to $11.8 billion-$12.1 billion in sales from $12.2 billion-$12.5 billion amid continued challenges in whole-bird turkey markets, production disruptions at one of its Planters facilities, and lower contract manufacturing sales. Meanwhile, the company narrowed its EPS guidance range to $1.57-$1.63, compared with $1.55-$1.65, leaving the midpoint unchanged. Our preannouncement estimates of $12.1 billion and $1.57 for sales and EPS, respectively, sit within the revised guidance, so we don't anticipate a major change to our $31 fair value estimate. After the Sept. 4, 2024, decline, shares sit close to our $31 fair value estimate.