Food and water are essential for daily life. While there are not many water companies to invest in, there are plenty of choices when it comes to food companies. Deciding which food companies to invest in may be no easy task. There are mass-produced foods, or there are healthy foods. There are snack foods, foods around convenience, and there are organic and high-end consumables. And there are restaurants of all sorts and price-points.
Goldman Sachs is taking a rather positive view on two iconic American food brands with very long operating histories. And as for the types of food these players offer, it’s a huge mix of all the above.
Oggonomics reviews the daily flow of Wall Street analyst calls covering upgrades and downgrades in a hunt for new ideas that might have otherwise been overlooked or missed. These analyst calls sometimes offer opportunities for short-term opportunistic traders and long-term investors who are looking for diamonds in the rough. Most analyst “Buy/Outperform” ratings come with implied upside of 10% to 12%.
Please read the disclaimers below because not all analyst report predictions come true. Some analyst reports even flop because the thesis was wrong or because fundamentals changed.
HORMEL FOODS
Goldman Sachs initiated Hormel Foods Corporation (NYSE: HRL) with a Buy rating and the firm issued a $35 price target. This represents 15% implied upside from the $30.41 prior close, as well as a 3.8% dividend yield for total return investors, if Goldman Sachs’ thesis proves out.
Hormel is said to have a strong packaged food portfolio. That portfolio ranges from brands, price points, and occasions over key protein categories. Goldman Sachs sees Hormel’s earnings outlook improving based on several factors:
- recovery of its Planters business,
- stabilization of its turkey supply
- ongoing cost savings
- reaccelerating growth into 2026
- an attractive stock valuation
Hormel has a 52-week range of $27.59 to $33.80 and a consensus analyst price target closer to $32.
TYSON FOODS
Tyson Foods, Inc. (NYSE: TSN) was initiated with a Buy rating and was assigned a $67 price target by Goldman Sachs, implying 23% upside from the prior $54.41 closing price. This is also when its stock is very close to a 52-week low and when the stock is down about 45% from early highs back in 2022.
Tyson is also considered to be diversified i its protein and meal offerings in a way that should reduce earnings volatility ahead. Goldman Sachs also noted that a cyclical low in profits around the beef market will have created an attractive buying opportunity for investors who are patient enough. At the end of the day, Goldman Sachs now believes that ongoing concerns around beef should be priced into the shares.
Another driver is that Tyson’s chicken operations are strong, while strength in its prepared foods portfolio can drive continued strength. Some of Tyson’s top brands are Tyson, Jimmy Dean, Hillshire Farm, BallPark, Hillshire Snacking, State Fair, and Aidell’s
Tyson has a 52-week range of $54.01 to $66.88.
DISCLAIMERS
All analyst ratings and price targets mentioned above that were named in this summary were issued by Goldman Sachs. Their ratings and targets may differ greatly from other firms on Wall Street.
Oggonomics does not issue any formal ratings and does not maintain any price targets of its own on any of these stocks. Please remember that no analyst ratings and price targets, even those with the strongest conviction, ever come with any guarantees of profits and they never contain money-back guarantees in case you lose money.
