Hormel Foods, the Consumer Defensive sector company, was revisited by a Wall Street analyst today. Analyst Peter Galbo from Bank of America Securities maintained a Hold rating on the stock and has a $28.00 price target.
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Peter Galbo has given his Hold rating due to a combination of factors surrounding Hormel Foods’ recent challenges. A significant issue is the voluntary recall of approximately 4.9 million pounds of ready-to-eat frozen chicken products, which were found to contain metal fragments. This recall affects about 1.8% of the company’s expected fourth-quarter foodservice volumes, translating to a minor impact on the overall fiscal year volumes.
While the recall is not expected to significantly alter Hormel’s full-year financial results, it does introduce short-term cost pressures related to the retrieval, disposal, and replacement of the affected products. Given these circumstances, Galbo maintains a neutral stance with a price objective of $28, as the current market price is $23.83. This suggests that while there is potential for some recovery, the risks and uncertainties associated with the recall justify a Hold rating at this time.