Hormel Foods (HRL) To Post Q2 Earnings: What's In The Cards?

Premium meat products company, Hormel Foods Corporation (NYSE:HRL) is slated to report second-quarter fiscal 2017 (ended Apr 2017) results on May 25, before the market opens.

Over the last one month, Hormel Foods’ shares yielded a return of 0.77%, as against the loss of 5% incurred by the Zacks classified Food-Meat Products industry.

The company has delivered a positive average earnings surprise of 1.16%, in the last four quarters.

Let’s see how things are shaping up prior to this announcement.

Existing Scenario

The company anticipates to report higher revenues in the quarters ahead, on the back of its diversified product portfolio, increased fresh pork supply export, elevated grain prices and strategic marketing programs.

In addition, the acquisition of Justin's LCC (May 2016) is expected to bolster the company’s Grocery Products' sales, moving ahead.

However, on the other side, the company believes that the prevailing oversupply situation in the turkey market would weigh over turkey prices. This, in turn, would hurt its Jennie-O Turkey Store business in the upcoming quarters of fiscal 2017. Furthermore, escalating operating expenses of the segment might adversely affect Hormel Foods’ aggregate bottom-line performance in the quarters ahead. Moreover, other headwinds such as stiff industry rivalry or a stronger U.S. dollar might significantly hamper near-term overseas revenues and profitability.

Over the last 60 days, the Zacks Consensus Estimate for this stock remained unchanged for fiscal 2017.

Earnings Whispers

Our proven model does not conclusively show that Hormel Foods will beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. That is not the case here as we will see below.

Zacks ESP: Hormel Foods currently has an Earnings ESP of 0.00%. This is because the Zacks Consensus Estimate of 40 cents is in line with the Most Accurate estimate.

Hormel Foods Corporation Price and EPS Surprise

Hormel Foods Corporation Price and EPS Surprise | Hormel Foods Corporation Quote

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Hormel Foods currently carries a favorable Zacks Rank #3. However, the company’s Earnings ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some stocks in the industry that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

MGP Ingredients, Inc. (NASDAQ:MGPI) , with an Earnings ESP of +2.44% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

AdvancePierre Foods Holdings, Inc. (NYSE:APFH) , with an Earnings ESP of +3.23% and a Zacks Rank #3.

Procter & Gamble Company (NYSE:PG) , with an Earnings ESP of +1.28% and a Zacks Rank #3.

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