HRL

Hormel Foods CorporationConsumer Defensive / Packaged FoodsINTACT

Hormel Foods Corporation develops, processes, and distributes various meat, nut, and other food products to foodservice, convenience stores, and commercial customers in the United States and internationally. It operates through three segments: Retail, Foodservice, and International. The company provides perishable products, including fresh meats, frozen items, refrigerated meal solutions, bacon, sausages, hams, guacamole, and other items that require refrigeration, as well as shelf-stable products, such as canned luncheon meats, nut butters, snack nuts, chili, shelf-stable microwaveable meals, hash, stews, tortillas, salsas, tortilla chips, and other items that do not require refrigeration. It sells its products under the HORMEL, ALWAYS TENDER, APPLEGATE, AUSTIN BLUES, BACON 1, BLACK LABEL, BREAD READY, BURKE, CAFÉ H, CERATTI, CHI-CHI'S, COLUMBUS, COMPLEATS, CORN NUTS, CURE 81, DAN'S PRIZE, DI LUSSO, DINTY MOORE, DON MIGUEL, DOÑA MARIA, EMBASA, FAST ‘N EASY, FIRE BRAISED, FONTANINI, HERDEZ, HORMEL GATHERINGS, HOUSE OF TSANG, JENNIE-O, JUSTIN'S, LA VICTORIA, LAYOUT, LLOYD'S, MARY KITCHEN, MR. PEANUT, NATURAL CHOICE, NUT-RITION, OLD SMOKEHOUSE, OVEN READY, PILLOW PACK, PLANTERS, ROSA GRANDE, SADLER'S SMOKEHOUSE, SKIPPY, SPAM, SQUARE TABLE, SPECIAL RECIPE, VALLEY FRESH, and WHOLLY brands through sales personnel, independent brokers, and distributors. The company was formerly known as Geo. A. Hormel & Company and changed its name to Hormel Foods Corporation in January 1995. Hormel Foods Corporation was founded in 1891 and is headquartered in Austin, Minnesota.

Share Price
$20.57
52W: $19.7 - $26.6
DCF Fair Value
$22.25
+7.6%
P/E (TTM)
33.2x
ROIC
8.3%
Operating Margin
11.1%
FCF Yield
5.5%
Debt / Equity
0.04x
Piotroski Score
7/9
Altman Z-Score
4.87
Market Cap
$11.3B

Price vs. Intrinsic Value Corridor

Modest Value ($20.57 vs $22.25 DCF)

Historical market price overlaid against conservative DCF Fair Value & Benjamin Graham Margin of Safety bands.

Period Return (1Y)
()
Period Range
$ - $
DCF Fair Value
$22.25
MOS Buy Target (-25%)
$16.69
Valuation Overlays:

2-Stage Discounted Cash Flow (DCF) Workbench

Conservative intrinsic value model based on owner cash generation over a 10-year investment horizon. Opens with LocalAlpha's baseline assumptions (matching the fair value shown above) — adjust any input to stress-test.

Current Market Price
$20.57
DCF Fair Value
$22.19
+7.3%
$622M
$100M$622M (Reported)$50,000M
5.5%
-5%10% (Target)35%
4.5%
0%5%20%
9.0%
6%9% (Standard)15% (High Risk)
2.5%
1% (GDP Floor)2.5% (Inflation)4.0%
-$300M (Net Cash)
-$100B CashBalance Sheet+$150B Debt
10-Yr PV of Cash Flows
$5.2B
PV of Terminal Value
$6.7B
Implied Enterprise Value
$11.9B
Implied Equity Value
$12.2B
YearYr 1Yr 2Yr 3Yr 4Yr 5Yr 6Yr 7Yr 8Yr 9Yr 10
Projected FCF ($M)$656$692$730$771$813$850$888$928$969$1,013
Present Value (PV)$602$583$564$546$528$507$486$466$446$428

Benjamin Graham & Buffett Value Models

Classical deep value metrics based on asset backing, normalized earnings power, and owner cash yield.

Graham Number-45.9% Premium
$14.10

Calculated as √(22.5 × EPS × BVPS). The maximum theoretical price a defensive investor should pay based purely on asset book value and current earnings.

EPS: $0.62BVPS: $14.25
Revised Graham Formula-115.4% Premium
$9.55

Formula: V = (EPS × (8.5 + 2g) × 4.4) / Y where g is the conservative 7-10 yr growth rate and Y is AAA Bond Yield.

Buffett Owner Earnings5.2% Yield
$1.07 / share

True distributable cash flow: Net Income + D&A - Maintenance CapEx. Reflects the cash Buffett would extract without hurting unit volume.

Total: $0.6BYield: 5.2%

Reverse DCF: Market Growth Expectation

MODEST BARRIER
4.4% CAGR (Next 10 Yrs)

At the current price of $20.57, the market is assuming the business will compound Free Cash Flow at 4.4% per year for the next decade with a 9% hurdle rate.

Value Investor Verdict
✓ Low market hurdle: Easy for a wide-moat compounder to beat.
Autonomous Thesis Underwriting

Surveil HRL with Mathematical Margin of Safety Rules

Set non-negotiable floor rules for Hormel Foods Corporation. If a newly filed quarterly 10-Q breaks your ROIC floor, operating margin boundary, or balance sheet leverage rules, receive an autonomous breach audit within 15 minutes.

Buffett Quality

ROIC > 15% • Margin > 15% • D/E < 0.5x

Margin Floor Guard

Current Margin 11.1% • Floor > 10%

Solvency Guard

Altman-Z > 2.6 • Current Ratio > 1.5x

Frequently Asked Questions: Hormel Foods Corporation (HRL) Intrinsic Valuation

Audited fundamentals, DCF intrinsic value sensitivity, and thesis break detection parameters for Hormel Foods Corporation.

Based on institutional multi-stage Discounted Cash Flow (DCF) modeling on audited SEC cash flows, Hormel Foods Corporation has an estimated DCF intrinsic fair value of $22.25 per share compared to its current market price of $20.57. This represents an estimated 7.6% margin of safety (trading below fair value). Additionally, its classic Benjamin Graham Number stands at $14.10.

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