Hormel Foods Outlook - Technical Weakness and Mixed Analyst Signals

Market Snapshot

Takeaway: Hormel Foods (HRL) is showing technical weakness with a weak internal diagnostic score of 3.89, suggesting investors may want to avoid the stock at this time.

News Highlights

Recent news in the food industry includes developments in delivery services and food safety regulations. DoorDash CEO Tony Xu is making moves to consolidate the food delivery space, acquiring companies like Deliveroo and SevenRooms. In India, the Supreme Court is pushing for clear food labeling regulations, emphasizing the impact of warning labels over star ratings. Additionally, Israel is shifting its approach to humanitarian aid in Gaza, focusing on military-directed food distribution to prevent Hamas involvement.

Analyst Views & Fundamentals

Analysts are split, with a simple average rating of 4.00 and a performance-weighted rating of 0.79. The ratings are inconsistent, showing a range from "Strong Buy" to "Underperform," with no clear consensus.

• ROA (Return on Assets): 1.34% with an internal diagnostic score of 4.35.
• EV/EBIT: 66.24x with an internal diagnostic score of 4.35.
• Net Profit Margin: -0.47% with an internal diagnostic score of 2.44.
• Annualized Return on Total Assets: 7.26% with an internal diagnostic score of 7.59.
• Basic Earnings Per Share (YoY Growth Rate): -14.67% with an internal diagnostic score of 1.00.
• Net Profit Attributable to Parent Company Shareholders (YoY Growth Rate): -14.10% with an internal diagnostic score of 3.10.

Money-Flow Trends

Big-money investors are showing a positive outlook with a fund-flow score of 7.92 (internal diagnostic score). Large and extra-large investors are inflowing funds at a ratio of 0.49 and 0.52, respectively. On the other hand, retail investors are less optimistic, with small investors showing a negative inflow trend. This mixed flow suggests a cautious but positive stance from institutional players.

Key Technical Signals

Several technical indicators are flashing signals for Hormel Foods:

• WR Overbought: internal diagnostic score of 1.00, indicating bearish bias.
• Long Lower Shadow: internal diagnostic score of 1.00, suggesting bearish signals.
• MACD Death Cross: internal diagnostic score of 2.44, showing a neutral bias.
• Bearish Engulfing: internal diagnostic score of 7.77, indicating a potential short-term opportunity.
• Earnings Release Date: internal diagnostic score of 7.59, suggesting a positive signal around earnings.
• RSI Oversold: internal diagnostic score of 4.35, pointing to potential oversold conditions.
• WR Oversold: internal diagnostic score of 3.10, indicating a neutral rise in price potential.

Recent chart patterns from the past week include:

• On September 11, a WR Overbought signal was detected.
• On September 2, Bearish Engulfing and RSI Oversold patterns were observed.
• On August 28, a combination of Long Lower Shadow, MACD Death Cross, Earnings Release Date, and RSI Oversold occurred.
• On September 15, a WR Oversold signal was noted.
• On August 29, an RSI Oversold pattern was identified.

These patterns suggest that the momentum is mixed, with bearish and bullish signals in balance. The overall trend remains weak, and it is advised to monitor market changes closely.

Conclusion

Hormel Foods appears to be in a period of transition, with mixed technical and analyst signals. While some indicators suggest bearish bias, others hint at potential opportunities around earnings and oversold conditions. Given the weak technical score and the mixed analyst ratings, investors may want to consider waiting for a clearer trend or a pull-back before entering a position.