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Hormel Foods Corporation

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Hormel Foods reported better-than-expected fourth-quarter fiscal 2017 results. While adjusted earnings of 41 cents per share surpassed the Zacks Consensus Estimate by a penny, revenues outpaced the same by 4.1%. In the quarters ahead, the company is poised to grow on the back of its stronger demand for products such as SKIPPY SPAM and Justin’s. Also, acquisitions made in fiscal 2017 are anticipated to boost revenues and profitability going forward. However, Hormel Foods’ shares have underperformed over the last three months and look overvalued compared with the industry. Meanwhile, the company stated that ongoing Jennie-O Turkey Store challenges might continue to hurt its revenues and profitability. Continued inflation in the prices of major inputs also remains a major cause of concern.

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