HRL At Support Zone: Bargain or Bear Trap?

August 29th, 2025 by Trefis Team
HRL: Hormel Foods logo
HRL
Hormel Foods

Hormel Foods (HRL) should be on your watchlist. Here is why – it is currently trading in the support zone ($23.96 – $26.48), levels from which it has bounced meaningfully before. In the last 10 years, the stock received buying interest at this level 4 times and subsequently went on to generate 30.9% in average peak returns.

  Peak Return Days to Peak Return
11/24/2015 25.2% 85
3/6/2018 9.8% 84
5/29/2018 62.8% 1423
2/8/2024 25.8% 102

But is the price action enough alone? It certainly helps if the fundamentals check out. For HRL Read Buy or Sell HRL Stock to see how convincing this buy opportunity might be.

Here are some quick data points:

  • Revenue Growth: 0.6% LTM and -1.5% last 3 year average.
  • Cash Generation: Nearly 5.2% free cash flow margin and 7.9% operating margin LTM.
  • Recent Revenue Shocks: The minimum annual revenue growth in last 3 years for HRL was -1.8%.
  • Valuation: HRL trades at a PE multiple of 18.4
  • Opportunity vs S&P: Compared to S&P, you get lower valuation, lower revenue growth, and lower margins

Hormel Foods provides a wide range of fresh, frozen, refrigerated, and shelf-stable meat, nut, and food products across grocery, refrigerated, turkey, and international segments.

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  HRL S&P Median
Sector Consumer Staples –
Industry Packaged Foods & Meats –
PE Ratio 18.4 24.2
   
LTM* Revenue Growth 0.6% 5.1%
3Y Average Annual Revenue Growth -1.5% 5.2%
Min Annual Revenue Growth Last 3Y -1.8% -0.3%
   
LTM* Operating Margin 7.9% 18.7%
3Y Average Operating Margin 8.6% 17.8%
LTM* Free Cash Flow Margin 5.2% 13.0%

*LTM: Last Twelve Months

That is one way to look at stocks. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure

What Is Stock-Specific Risk If The Market Crashes?

That said, HRL isn’t immune to big drops. It fell 37% in the Dot-Com bubble and even more, 40%, in the Global Financial Crisis. During the 2022 inflation shock, it sank over 42%. Smaller hits like the 2018 correction and Covid sell-off still carved out losses around 17-19%. Solid fundamentals can’t fully shield you when the broader market takes a tumble.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.