Hormel Foods Corporation (HRL) DCF Valuation
TGM's two-stage DCF values Hormel Foods Corporation (HRL) between $19.34 and $40.79 depending on assumptions, with a base case of $27.41. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$24.44 is justified only if free cash flow grows about +0.9% a year (fading to 2.5% long-run) at a 7.5% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 8.5% | $19.34 |
| Base case | 3.2%/yr | 7.5% | $27.41 |
| Optimistic | 6.2%/yr | 6.5% | $40.79 |
| Analyst DCF (FMP) | independent reference — different model | $30.78 | |
Current Price
$24.44
Market-Implied Growth
+0.9%/yr
vs +2.0% 5Y actual
Model Scenario Range
$19.34 – $40.79
model output — not a price target
HRL DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for HRL (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $817.5M · 0.55B shares · net debt $2.2B
Estimated Fair Value
$28.22
+15.5% vs $24.44
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 3.2%/yr FCF growth and 10-year horizon fixed. Green = above today's $24.44; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $39.45 | $43.94 | $49.92 | $58.30 | $70.88 |
| 6.5% | $30.58 | $33.15 | $36.36 | $40.48 | $45.98 |
| 7.5% | $24.68 | $26.29 | $28.22 | $30.58 | $33.53 |
| 8.5% | $20.47 | $21.55 | $22.80 | $24.28 | $26.06 |
| 9.5% | $17.33 | $18.08 | $18.93 | $19.92 | $21.07 |
About Hormel Foods Corporation
Hormel Foods Corporation is a prominent global food company that specializes in the creation, preparation, and supply of a diverse array of meat, nut, and other culinary items. Its extensive clientele spans retail outlets, institutional food providers (foodservice), specialty delis, and various commercial enterprises across the United States and internationally. The company's operations are strategically structured into four main divisions: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other. Hormel's product portfolio is broad, encompassing numerous perishable goods such as fresh meats, frozen food selections, convenient refrigerated meal options, a variety of sausages, hams, guacamole, and bacon. Additionally, it offers a wide range of non-perishable items, including canned luncheon meats, various nut butters, snack nuts, chili, microwave-ready meals, hashes, stews, tortillas, salsas, and tortilla chips. Beyond these offerings, Hormel Foods is also actively involved in the processing, promotion, and distribution of both branded and unbranded products derived from pork, beef, poultry, and turkey. The company further supplies nutritional food items and supplements, dessert and beverage mixes, and industrial-grade gelatin. Its extensive product line is marketed under numerous widely recognized brand names, including SKIPPY, SPAM, Hormel, Natural Choice, Applegate, Justin's, Jennie-O, Café H, Herdez, Black Label, Sadler's, Columbus, Gatherings, Wholly, Planters, NUT-rition, Planters Cheez Balls, and Corn Nuts. These products reach consumers through a multi-channel distribution network, utilizing internal sales teams, independent brokers, and various distributors. Founded in 1891 as Geo. A. Hormel & Company, the organization was officially rebranded as Hormel Foods Corporation in January 1995. Its corporate headquarters are located in Austin, Minnesota.
- Sector
- Consumer Defensive
- Industry
- Packaged Foods
- CEO
- Jeffrey Ettinger