NEW YORK (TheStreet) -- Shares of Hormel Foods (HRL) are down 2.53% to $47.30 after the company reported second quarter 2014 earnings of 52 cents per share versus 46 cents a year ago, but below the 56 cents analysts expected.
Sales were $2.2 billion, a 4 % increase, but volume fell 1% from a year ago.
The food company affirmed full year 2014 EPS guidance of $2.17 to 2.27, Analysts' target is $2.26.
TheStreet Ratings team rates HORMEL FOODS CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HORMEL FOODS CORP (HRL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HRL's revenue growth has slightly outpaced the industry average of 3.0%. Since the same quarter one year prior, revenues slightly increased by 6.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- HRL's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.39, which illustrates the ability to avoid short-term cash problems.
- HORMEL FOODS CORP has improved earnings per share by 18.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HORMEL FOODS CORP increased its bottom line by earning $1.94 versus $1.86 in the prior year. This year, the market expects an improvement in earnings ($2.25 versus $1.94).
- Net operating cash flow has significantly increased by 121.62% to $314.29 million when compared to the same quarter last year. In addition, HORMEL FOODS CORP has also vastly surpassed the industry average cash flow growth rate of -20.80%.
- You can view the full analysis from the report here: HRL Ratings Report