Hormel Foods produces and markets various meat and food products worldwide. The company operates in five segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other. The company was founded in 1891 and is based in Austin, Minnesota.
HRL Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Hormel Foods Corp. To summarize, we found that Hormel Foods Corp ranked in the 25th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. As for the metrics that stood out in our discounted cash flow analysis of Hormel Foods Corp, consider:
The company's debt burden, as measured by earnings divided by interest payments, is 87.78 -- which is good for besting 93.82% of its peer stocks (US stocks in the Consumer Defensive sector with positive cash flow).
The business' balance sheet suggests that 1% of the company's capital is sourced from debt; this is greater than just 5.77% of the free cash flow producing stocks we're observing.
HRL's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 56.62% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
K, EDU, KMB, EL, and KOF can be thought of as valuation peers to HRL, in the sense that they are in the Consumer Defensive sector and have a similar price forecast based on DCF valuation.
• The surprisingly strong employment report for May may hinder another round of coronavirus stimulus measures, according to analysts. • President Donald Trump hailed the surprisingly good unemployment numbers in a previously unscheduled news conference at the White House Friday morning. “We had a tremendous morning, a tremendous announcement,” Trump said.
Net proceeds from the new notes will be used for general corporate purposes, which Moody's anticipates will include acquisitions. The stable outlook reflects Moody's expectation that Hormel will sustain stable operating performance and a conservative financial profile even as it pursues growth through acquisitions.