The firm believes that Wall Street underestimates Hormel's top-line and earnings growth momentum.
The company is also the best positioned food company in the space to capitalize on growing consumer demand for convenient protein products and deflationary meat cost trends.
Additionally, Hormel will continue to drive its margins sustainably higher by shifting its mix to value-added products, according to Credit Suisse.
"Heavy short interest on the stock eventually will dissipate as the company continues to beat consensus expectations," the firm wrote in a note earlier today.
Last week, Credit Suisse met with Hormel management, which reinforced its positive view on the stock and boosted its confidence that the company will guide to a stronger fiscal 2017 compared to consensus estimates.
"In an environment where packaged food peers are rationalizing their portfolios and turning almost exclusively to cost-cutting to adjust to slowing consumer demand, Hormel has increased its investment in advertising and new product launches. As a result, we expect top-line growth to keep moving higher while others are moving lower," the firm noted.
Credit Suisse has an "outperform" rating and $43 price target on Hormel shares.
The firm removed Kellogg (K) from its U.S. "focus list" earlier today.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of A on the stock.
The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, revenue growth, notable return on equity and largely solid financial position with reasonable debt levels by most measures.
The team believes its strengths outweigh the fact that the company shows weak operating cash flow.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: HRL