Hormel Foods Corporation

DB:HO7 Stock Report

Market Cap: €15.2b

Hormel Foods Valuation

Is HO7 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of HO7 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: HO7 (€27.63) is trading below our estimate of fair value (€54.04)

Significantly Below Fair Value: HO7 is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for HO7?

Key metric: As HO7 is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for HO7. This is calculated by dividing HO7's market cap by their current earnings.
What is HO7's PE Ratio?
PE Ratio20.6x
EarningsUS$780.78m
Market CapUS$16.02b

Price to Earnings Ratio vs Peers

How does HO7's PE Ratio compare to its peers?

The above table shows the PE ratio for HO7 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average10.6x
SZU Südzucker
6.7x-10.2%€2.3b
SSH Südwestdeutsche Salzwerke
17xn/a€714.5m
NLM FRoSTA
11.9xn/a€412.2m
SMB Schwälbchen Molkerei Jakob Berz
6.7xn/a€55.8m
HO7 Hormel Foods
20.6x10.2%€16.0b

Price-To-Earnings vs Peers: HO7 is expensive based on its Price-To-Earnings Ratio (20.6x) compared to the peer average (10.6x).

Price to Earnings Ratio vs Industry

How does HO7's PE Ratio compare vs other companies in the European Food Industry?

3 CompaniesPrice / EarningsEstimated GrowthMarket Cap
HO7 20.6xIndustry Avg. 13.5xNo. of Companies18PE0816243240+
3 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: HO7 is expensive based on its Price-To-Earnings Ratio (20.6x) compared to the European Food industry average (13.4x).

Price to Earnings Ratio vs Fair Ratio

What is HO7's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

HO7 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio20.6x
Fair PE Ratio22.9x

Price-To-Earnings vs Fair Ratio: HO7 is good value based on its Price-To-Earnings Ratio (20.6x) compared to the estimated Fair Price-To-Earnings Ratio (22.9x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst HO7 forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current€27.63
€29.54
+6.9%
6.9%€33.29€25.89n/a10
Nov ’25€28.20
€29.54
+4.8%
6.9%€33.29€25.89n/a10
Oct ’25€28.34
€28.86
+1.8%
6.9%€32.42€25.21n/a10
Sep ’25€29.18
€29.23
+0.2%
7.7%€33.65€25.46n/a10
Aug ’25€29.99
€29.38
-2.0%
6.0%€32.39€25.91n/a10
Jul ’25€28.49
€29.38
+3.1%
6.0%€32.39€25.91n/a10
Jun ’25€28.29
€29.19
+3.2%
6.3%€32.26€25.81n/a9
May ’25€32.97
€28.96
-12.2%
6.8%€32.00€25.60n/a10
Apr ’25€31.60
€28.96
-8.4%
6.8%€32.00€25.60n/a10
Mar ’25€30.93
€29.38
-5.0%
6.9%€32.30€25.84n/a10
Feb ’25€28.12
€28.00
-0.4%
8.1%€30.73€23.92n/a10
Jan ’25€28.94
€28.43
-1.8%
7.1%€31.03€24.15n/a9
Dec ’24€28.40
€28.78
+1.3%
11.5%€36.66€23.89n/a9
Nov ’24€30.78
€33.01
+7.2%
12.2%€39.75€27.45€28.209
Oct ’24€36.23
€36.03
-0.6%
7.3%€39.14€30.76€28.349
Sep ’24€35.54
€36.52
+2.8%
8.7%€41.87€30.63€29.189
Aug ’24€37.47
€36.57
-2.4%
8.6%€40.11€30.24€29.999
Jul ’24€36.76
€37.41
+1.8%
7.8%€41.14€31.93€28.499
Jun ’24€37.63
€38.27
+1.7%
9.9%€45.45€32.53€28.298
May ’24€36.72
€37.87
+3.1%
10.3%€44.57€31.90€32.978
Apr ’24€36.23
€39.12
+8.0%
9.8%€45.99€32.92€31.609
Mar ’24€41.28
€41.61
+0.8%
9.6%€47.93€34.56€30.9310
Feb ’24€41.66
€41.61
-0.1%
9.6%€47.93€34.56€28.1210
Jan ’24€42.61
€42.69
+0.2%
9.8%€49.06€35.38€28.9410
Dec ’23€44.69
€42.99
-3.8%
9.8%€49.40€35.63€28.4010
Nov ’23€46.84
€46.08
-1.6%
9.9%€52.84€38.10€30.7810

Analyst Forecast: Target price is less than 20% higher than the current share price.

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