In a report published Monday, Credit Suisse analyst Robert Moskow upgraded Hormel Foods HRL from Neutral to Outperform, and raised the price target from $39.00 to $46.00.
In the report, Credit Suisse noted, “Relative call more so than a call about absolute upside. This call should be targeted to consumer sector specialists evaluating stocks on a relative basis. Hormel has roughly 11% upside over the next 12 months versus zero for the food group. We are incrementally more negative on the food sector due to 1) earnings risk in the back half of 2013 and 2) historically high valuation (food stocks +25% YTD). We are positive on Hormel because of strong upside to the turkey margin in FY14 and conservative accretion estimates for the Skippy peanut butter business.”
Hormel Foods closed on Friday at $41.44.
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