Bank of America Securities has moved $HRL up the ladder, shifting its rating from “Underperform” to “Neutral” with a price target of $35. The call comes as Hormel starts showing real signs of operational strength and cost discipline, especially in areas that have weighed on the company for years.
🔹 Turnaround in Jennie-O Turkey
Years of underperformance in Hormel’s turkey business are beginning to reverse. Reduced industry supply, better pricing power, and easing grain costs are setting the stage for margin recovery in the Jennie-O segment.
🔹 Solid Demand for Core Protein Products
Hormel’s pork-based offerings remain a stable revenue driver, with consumer demand holding up and raw material costs staying manageable. This strength is helping offset challenges in other areas.
🔹 Focused Cost-Saving Measures
The company’s renewed focus on expense control is starting to pay off. These internal efficiencies are improving margins and bolstering the company’s near-term earnings picture.
BofA’s upgrade signals a more balanced risk-reward outlook for $HRL in the current environment.
💸 Dividend Snapshot for $HRL
💰 Annual Dividend: $1.16
📉 Yield: Around 3.8%
🧮 Payout Ratio: Approximately 84%
📈 Streak: 59 consecutive years of dividend growth
Hormel’s commitment to its dividend is one of the most dependable in the consumer staples space, making it an appealing option for income-focused portfolios even during transitional phases.