HORMEL FOODS CORP /DE/

HRL

Forward P/E: 14.10×
Mkt cap: 12.1 B USD
EV: 14.3 B USD
Sector: Consumer Defensive
Coverage: 2008–2025
Currency: USD
Next event: Dec 5, 2026

JP Valuation

JP Score

31,1

Out of profile · window 5 years

JP entry price

OUT OF PROFILE

No target price is issued: the company falls outside the profile this method looks for.

Financial comments4

The share count grows: net dilution.
Stagnation: 3-year earnings CAGR at or below zero. It is scored, not cut: the penalty is charged by the Impairment modifier, where it is continuous and capped.
ROIC below the required return: growth destroys value.
Impairment of earnings: 4 % of the window, weighted by recency → 0.5 points. It is the only place in the model where a bad year subtracts.

Quality factors

Each factor scores 0–100 on its own scale; the score is their weighted average.

Score	Weight → points
Growth consistency21 Earnings · fit to the log-linear line · σ_resid = 0.13422 %0 Earnings · hit rate · 47 %16 %2 Earnings · volatility · σ = 0.23011 %14 Revenue · fit to the log-linear line · σ_resid = 0.02514 %29 Revenue · hit rate · 50 %11 %3 Revenue · volatility · σ = 0.0427 %95 Forward · trajectory coherence · consensus 6.7 % vs. trend -14.5 %20 %38	·20 → 4,11
Growth pace14 Realized · -14.1 %50 %3 Expected · 6.7 %50 %25	·20 → 2,89
No recent stagnation46 Realized slowdown · 1.48×50 %0 Expected slowdown · -0.47×50 %93 3-year earnings CAGR at or below zero (-20.9 %): the engine has slowed. It is scored on the acceleration scale, not cut — a binary cut turned a continuous fact into a cliff, and fired on 36 % of the universe. Stagnation: 3-year earnings CAGR at or below zero. It is scored, not cut: the penalty is charged by the Impairment modifier, where it is continuous and capped.	·15 → 6,97
FCF quality87 FCF / net income conversion · 1.12×100 %87 Window chosen: last 3 years (the best of those evaluated). Alternative · last 5 years: conversion 1.01× → 76 points. Positive FCF in 3 of the 3 years in the window.	·15 → 13,04
Debt35 Net debt / EBITDA · 2.23×100 %35 Interest coverage (EBIT / \|interest\|) = 13.0×.	·15 → 5,32
Return on invested capital (ROIC)14 Level (recency-weighted mean) · 7.1 %50 %9 Spread over the required return · −0.0 pp over the 10 % required30 %21 Trend · −4.2 pp over 5 years20 %15 Average ROIC (7.1 %) below the required return (10 %): growth destroys value. ROIC below the required return: growth destroys value.	·15 → 2,08
Weighted base	·100 → 34,41

Modifiers and penalties

The factors build the score; the modifiers correct it, within +23 / −28. Same 0–100 bar, 100 is always good.

Score	Range	Points
Gross margin trend · −1.4 pp accumulated over 4 years36	±8	-2,3
Altman Z'' · Z'' = 7.95100	0/−15	0,0
Shareholder returns · dilutes 0.2 % a year0 Effective buyback (net share count) · 0.2 % of dilution0 Dividend yield (last DPS / price today) · 5.3 % · does not count: the active branch is dilution—	+15/−5	-0,5
Impairment · 4 % · worst magnitude: earnings96 Earnings · 4.4 %96 Free cash flow · 2.4 %98 EBITDA · 0.0 %100	0/−12	-0,5
34,4 − 2,3 + 0,0 − 0,5 − 0,5 =31,1

Calculated on Sep 5, 2026

Score

Weight → points

Growth consistency21

Earnings · fit to the log-linear line · σ_resid = 0.13422 %0
Earnings · hit rate · 47 %16 %2
Earnings · volatility · σ = 0.23011 %14
Revenue · fit to the log-linear line · σ_resid = 0.02514 %29
Revenue · hit rate · 50 %11 %3
Revenue · volatility · σ = 0.0427 %95
Forward · trajectory coherence · consensus 6.7 % vs. trend -14.5 %20 %38

·20 → 4,11

Growth pace14

Realized · -14.1 %50 %3
Expected · 6.7 %50 %25

·20 → 2,89

No recent stagnation46

Realized slowdown · 1.48×50 %0
Expected slowdown · -0.47×50 %93
3-year earnings CAGR at or below zero (-20.9 %): the engine has slowed. It is scored on the acceleration scale, not cut — a binary cut turned a continuous fact into a cliff, and fired on 36 % of the universe.
Stagnation: 3-year earnings CAGR at or below zero. It is scored, not cut: the penalty is charged by the Impairment modifier, where it is continuous and capped.

·15 → 6,97

FCF quality87

FCF / net income conversion · 1.12×100 %87
Window chosen: last 3 years (the best of those evaluated).
Alternative · last 5 years: conversion 1.01× → 76 points.
Positive FCF in 3 of the 3 years in the window.

·15 → 13,04

Debt35

Net debt / EBITDA · 2.23×100 %35
Interest coverage (EBIT / |interest|) = 13.0×.

·15 → 5,32

Return on invested capital (ROIC)14

Level (recency-weighted mean) · 7.1 %50 %9
Spread over the required return · −0.0 pp over the 10 % required30 %21
Trend · −4.2 pp over 5 years20 %15
Average ROIC (7.1 %) below the required return (10 %): growth destroys value.
ROIC below the required return: growth destroys value.

·15 → 2,08

Weighted base

·100 → 34,41

Score

Range

Points

Gross margin trend · −1.4 pp accumulated over 4 years36

±8

-2,3

Altman Z'' · Z'' = 7.95100

0/−15

0,0

Shareholder returns · dilutes 0.2 % a year0

Effective buyback (net share count) · 0.2 % of dilution0
Dividend yield (last DPS / price today) · 5.3 % · does not count: the active branch is dilution—

+15/−5

-0,5

Impairment · 4 % · worst magnitude: earnings96

Earnings · 4.4 %96
Free cash flow · 2.4 %98
EBITDA · 0.0 %100

0/−12

-0,5

34,4 − 2,3 + 0,0 − 0,5 − 0,5 =31,1