HRL May Not be Able to Restore Revenue Momentum in FY10
Analyst Christina McGlone of Deutsche Bank maintains her “hold” rating on Hormel Foods (NYSE: HRL), while raising her estimates for the company. The target price for HRL is set to $38.
According to Deutsche Bank, Hormel Foods has reported its 4Q09 EPS ahead of the estimates and the consensus. HRL has indicated that its volumes and sales fell during the quarter due to the dissolution of its Carapelli JV, product rationalization, difficult comparisons, planned reductions at the JOTS segment and lower commodity price pass through in turkey and pork.
Deutsche Bank expresses its concern regarding Hormel Foods’ ability to restore revenue momentum during FY10. The issues associated with HRL’s raw material costs and fuel-freight costs are expected to worsen in 2H10, Deutsche Bank adds.
Deutsche Bank has raised its EPS estimate for FY10 from $2.59 to $2.69.
