JPMorgan Downgrades Hormel (HRL) to Neutral on Rising Cost Pressures

Hormel Foods Corporation (NYSE:HRL) is included among the 15 Best Cheap Dividend Stocks to Buy.

On April 9, JPMorgan downgraded Hormel Foods Corporation (NYSE:HRL) to Neutral from Overweight. It lowered the stock’s price target to $23 from $28. The firm said margin pressure is starting to build and is not reflected in the company’s 2026 outlook. It pointed to rising freight costs, which appear more persistent than expected, affecting both spot rates and fuel surcharges, the analyst tells investors in a research note.JPMorgan also said recent price increases, including those for ground turkey and Planters, “seem to have triggered greater price elasticity than prior rounds of pricing.”

During the fiscal Q1 2026 earnings call, Interim CFO Paul Kuehneman reiterated that the company is maintaining its full-year outlook. He said Hormel still expects organic net sales growth of 1% to 4%, adjusted operating income growth of 4% to 10%, and adjusted diluted EPS in the range of $1.43 to $1.51. Interim CEO Jeffrey Ettinger added that for Q2, the company expects another quarter of top-line growth. Adjusted diluted EPS is projected to be roughly flat to slightly higher than the prior year.

Management also noted that the pending whole-bird turkey transaction is expected to reduce fiscal 2026 net sales by about $50 million. Most of the related sales will still be included in reported results for the year.

Hormel Foods Corporation is a global branded food company. It develops, processes, and distributes a range of food products across multiple markets through its Retail, Foodservice, and International segments.

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