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Shares of Hormel Foods Corporation (HRL - Analyst Report) scaled a new 52-week high of $50.75 during its trading session on Aug 28. The new apex represents a slight increase over the previous high of $50.73 reached on Aug 21, 2014.

Hormel Foods closed the session at $50.65, reflecting a year-to-date return of 13.6%. The trading volume for the session was roughly 0.59 million shares. Earnings estimate revisions for fiscal years 2014 and 2015 as well as an expected earnings growth rate of 8% for the next five years, indicate further upward potential for this meat products company.

Growth Drivers

Hormel Foods’ solid results for third-quarter fiscal 2014 (ended Jul 27, 2014) have strengthened investors’ confidence regarding its financial position. While the share price has risen by 5.8% since Aug 21, earnings estimates have also witnessed an upward revision. A brief snapshot of the quarterly result will justify the market’s positive reaction.

Earnings grew 21% to 51 cents per share driven by improved top-line and margin performance. Revenues came in at $2.3 billion, increasing 5.8% year over year. Of the segments, growth in Refrigerated Foods, Jennie-O Turkey Store and International & Other segments were partially offset by a decline in Grocery Products and Specialty Foods segments.

For fiscal 2014, Hormel Foods anticipates improved results from the Jennie-O Turkey Store, International & Other and Specialty Foods segments. SKIPPY peanut butter items and Hormel Rev snack wraps are also expected to gain momentum. Earnings are guided in the range of $2.17 to $2.27 per share.

In addition, the recently acquired assets of CytoSport Holdings, Inc., the renowned Muscle Milk producer, will add $370 million to the company’s revenue generation capacity. The acquisition is expected to be accretive to fiscal 2015 earnings per share.

Estimate Revisions Show Potency

Over the last 30 days, the Zacks Consensus Estimate for Hormel Foods has climbed 1.8% to $2.23 for fiscal 2014, and 1.2% to $2.57 for fiscal 2015. These estimates reflect year-over-year growth of 14.4% for fiscal 2014 and 15.4% for fiscal 2015.

With a market capitalization of $13.4 billion, Hormel Foods currently carries a Zacks Rank #2 (Buy). Some other stocks worth considering in the food industry include Pilgrim's Pride Corporation (PPC - Snapshot Report), Sanderson Farms, Inc. (SAFM - Snapshot Report) and Treehouse Foods, Inc. (THS - Snapshot Report). All these stocks sport a Zacks Rank #1 (Strong Buy).
 

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