JPMorgan Downgrades Hormel Foods Stock As Rising Cost Pressures Threaten Profit Margins

Key Stats for Hormel Foods Stock

• YTD price change for Hormel Foods stock: -10%
• $HRL Stock Price as of Apr. 9: $21
• 52-Week High: $32
• $HRL Stock Price Target: $27

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What Happened?

Hormel Foods (HRL) stock hit a new 52-week low on Thursday after JPMorgan Chase downgraded the company from Overweight to Neutral, cutting its price target to $23. The stock briefly touched $20.62 before recovering slightly to close near $21.13.

The downgrade comes after Hormel reported Q1 fiscal 2026 earnings.

• On the surface, the results weren’t bad.
• The company delivered organic net sales growth of 2% — its fifth consecutive quarter of top-line growth — and adjusted EPS of $0.34.
• But the profit picture is under real pressure, and that’s what has JPMorgan concerned.

• Beef costs remain stubbornly high and are expected to stay that way throughout the year.
• Pork trim prices jumped 12% compared to last year.
• Nut costs are also elevated.
• On top of all that, freight and logistics expenses spiked in the back half of Q1 due to severe winter weather and tighter carrier availability.
• Management flagged that these freight pressures have continued into Q2, and it’s still unclear whether they’re temporary or here to stay.

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What the Market Is Telling Us About Hormel Foods Stock

Hormel Foods stock has been struggling for a while.

• The Retail segment — the company’s largest — posted declining sales and weaker margins in Q1.
• Part of that was intentional, as Hormel exited some low-margin private-label snack nut products.
• But higher input costs and logistics headwinds made things worse than expected.

The company is also in the middle of selling its whole-bird turkey business to Life-Science Innovations. This move cuts exposure to a volatile, low-margin commodity business and should help margins in the long term.

But the financial benefit won’t be meaningful until fiscal 2027.

For now, Hormel Foods stock is stuck in a difficult spot.

• Management reaffirmed full-year guidance, expecting EPS of $1.43 to $1.51 and organic net sales growth of 1% to 4%.
• But getting there requires a meaningful profit acceleration in the second half — driven by pricing benefits, restructuring savings, and easing commodity costs.
• That’s a lot of things needing to go right.

Most analysts are sitting on the sidelines.

• Of the nine analysts covering Hormel Foods stock, six have a Hold rating, two have a Buy, and one has a Sell.
• The average price target sits at $27, which implies meaningful upside from current levels — but JPMorgan’s downgrade signals that the near-term path there isn’t straightforward.

For patient, income-focused investors, the stock’s dividend history — 390 consecutive quarterly payments — is worth noting.

But until cost pressures ease, Hormel Foods stock may stay range-bound.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!