Hormel Foods Corporation HRL is continuing to reshape its portfolio, agreeing to sell the Brazil-based CERATTI operations to Zanchetta Alimentos LTDA as the packaged food company sharpens focus on higher-growth markets and streamlines the international business.
The divestiture reflects Hormel Foods' broader strategy of directing resources toward markets and brands with stronger long-term growth prospects while reducing operational complexity. The transaction is expected to close in the coming weeks. Until then, Ceratti's operations are expected to continue without disruption for employees, customers and business partners.
Importantly for investors, Hormel Foods indicated that the sale is expected to have only a minimal impact on adjusted fiscal 2026 results.
The move also aligns with a broader pattern that has emerged across Hormel Foods' portfolio strategy over the past year. The company recently exited the whole-bird turkey business and has reduced exposure to lower-margin or more volatile operations while increasing its emphasis on branded, value-added protein offerings. Those efforts appear to be gaining traction, as Hormel Foods delivered its sixth consecutive quarter of organic sales growth and posted double-digit adjusted earnings growth in the second quarter of fiscal 2026.
The company's international business has also been showing encouraging momentum. International segment profit climbed 20% in the second quarter of fiscal 2026, supported by strong performance in China and robust demand for SPAM exports. The Ceratti sale marks another step in Hormel Foods' ongoing portfolio optimization efforts to continue refining its portfolio and international footprint.
Hormel Foods’ Share Price Performance
Shares of this Zacks Rank #2 (Buy) company have gained 14.3% over the past three months, outperforming the industry’s 5.3% decline and the broader Consumer Staples sector’s 6.7% increase. However, the stock lagged the S&P 500’s 16.3% advance over the same period.
HRL Stock's Past 3 Months’ Performance
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Is Hormel Foods a Value Play Stock?
Hormel Foods currently trades at a forward 12-month P/E ratio of 17.17 compared with the industry average of 12.45. This valuation places the stock at a premium relative to peers, indicating broader market expectations around its business stability and ability to navigate current cost and demand dynamics.
HRL Valuation Picture
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Other Stocks to Consider
Darling Ingredients Inc. DAR develops, produces and sells sustainable natural ingredients from edible and inedible bio-nutrients. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Darling Ingredients’ current fiscal-year sales and earnings indicates growth of 12.3% and 575%, respectively, from the prior-year reported levels. Darling Ingredients delivered a trailing four-quarter earnings surprise of 16.1%, on average.
Tyson Foods, Inc. TSN operates as a food company worldwide. It operates through four segments: Beef, Pork, Chicken and Prepared Foods. TSN currently carries a Zacks Rank of 2. Tyson Foods delivered a trailing four-quarter earnings surprise of 18.1%, on average.
The Zacks Consensus Estimate for Tyson Foods’ current fiscal-year sales and earnings indicates growth of 4.4% and 1%, respectively, from the year-ago reported numbers.
Mama's Creations, Inc. MAMA manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA holds a Zacks Rank of 2. Mama's Creations delivered a trailing four-quarter earnings surprise of 129.2%, on average.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 30% and 73.3%, respectively, from the year-ago figures.
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Hormel Foods Corporation (HRL): Free Stock Analysis Report
Tyson Foods, Inc. (TSN): Free Stock Analysis Report
Darling Ingredients Inc. (DAR): Free Stock Analysis Report
Mama's Creations, Inc. (MAMA): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).