Stock Analysis | Hormel Foods Outlook - Cautious Technicals and Mixed Analyst Signals

1. Market Snapshot

Hormel Foods (HRL) is showing signs of volatility with weak technical indicators and a 12.69% price drop in recent trading, urging investors to proceed with caution. The overall technical score of 4.01 (internal diagnostic score) reflects an uneven balance between bearish and bullish signals, with more caution needed on the chart side.

2. News Highlights

Recent news items affecting the food sector include:

• DoorDash's Expansion - DoorDash's recent acquisitions of Deliveroo and SevenRooms highlight the growing interest in food delivery infrastructure, which may indirectly support Hormel's supply chain partners.
• Diabetic Food Market Growth - The diabetic food market is expected to hit USD 24.86 billion by 2033, driven by rising demand for low-sugar and low-carb products. Hormel’s position in the food market could benefit from this long-term shift.
• India’s Processed Food Exports Surge - India's processed food exports jumped 15% YoY to $2.13 billion in April, signaling strong demand for processed products globally. Hormel, as a major player in processed foods, might see similar export opportunities.

3. Analyst Views & Fundamentals

Analysts show a mixed outlook with a simple average rating of 4.00 and a performance-weighted rating of 0.79, indicating low confidence in recent forecasts. The ratings are also highly dispersed, ranging from "Strong Buy" to "Underperform."

Regarding recent price trends, the stock has declined by 12.69%, aligning with the pessimistic market expectations. Here are key fundamental values and their internal diagnostic scores:

• Annualized ROE: 8.75% – Score 8.75 (internal diagnostic score of 0.28)
• EV/EBIT: 66.24 – Score 0.04 (internal diagnostic score of 0.04)
• Gross Profit Margin: 16.30% – Score -0.11 (internal diagnostic score of -0.11)
• Net Income to Revenue: -0.47% – Score 0.17 (internal diagnostic score of 0.17)
• Income Tax / Total Profit: 21.91% – Score 0.43 (internal diagnostic score of 0.43)

4. Money-Flow Trends

Money flows for Hormel Foods are positive overall, with a fund-flow score of 7.92 (internal diagnostic score of 7.92), indicating strong institutional and retail inflows:

• Large Inflow Ratio: 48.64% – Suggesting institutional buying activity.
• Small Inflow Ratio: 49.85% – Retail investors also showed significant participation.
• Extra-Large Inflow Ratio: 51.47% – Big-money flows were particularly strong.

5. Key Technical Signals

Here are the most relevant technical indicators and their internal diagnostic scores (0-10):

• MACD Death Cross: 2.44 – Suggests bearish pressure but not extreme.
• WR Overbought: 1.00 – Strong bearish signal with a 31.25% win rate.
• Bearish Engulfing: 7.67 – A neutral to slightly bullish signal with a 72.73% win rate.
• Earnings Release Date: 7.59 – Market typically reacts well on these days, with a 75.0% win rate.

Recent chart patterns over the last five days include:

• Aug 28: Bearish Engulfing + RSI Oversold – Mixed signals.
• Aug 29: RSI Oversold – Suggesting potential recovery.
• Aug 22: WR Overbought – Bearish pressure confirmed.

Key insights from the technical analysis include:

• Technical indicators are mixed, with volatility and unclear direction.
• Short-term momentum is weak, with balanced bearish and bullish signals.

6. Conclusion

With a weak technical score and mixed analyst ratings, investors may want to wait for more clarity on Hormel Foods' earnings and price direction before making large moves. The recent inflow of both large and small capital suggests that the market remains interested in the stock, but caution is warranted given the current volatility. Keep a close watch on the earnings release date on Sept 2, 2025 for a potential catalyst.