Hormel Foods Corporation (NYSE:HRL) is expected to deliver a solid 21.36% in earnings growth per share over the next three years. With the recent EPS being $1.651, expected growth will push the upcoming EPS to $2.003. To assess the reasonability of HRL’s earnings growth per share, we should look at its most recent growth rate delivered. Check out our latest analysis for Hormel Foods

Exciting times ahead for HRL

HRL is covered by 11 analysts who by consensus are expecting earnings to increase from today’s level of $1.651 to $2.003 over the next couple of years. This indicates a relatively solid earnings per share growth rate of 21.36% over the next few years, which is an optimistic outlook in the near term. During the same time we will see the revenue grow from $9,303M to $10,772M and net income is predicted to slightly grow from $873M to $1,059M in the next couple of years, growing by 21.36%. Though, at the current levels of revenue and profit, margins are certainly underwhelming.

Basis for the growth

The past can be a helpful indicator for future performance for a stock. We can determine whether this level of expected growth is sustainable and whether the company continues to go from strength to strength. HRL’s earnings growth the past couple of years was 60.66% which indicates that the company’s past performance will continue to persist into the future. This means HRL has already proven its capacity to grow at a strong rate, which should give investors higher conviction of analysts’ consensus prediction for the company’s future growth going forward.

Next Steps:

For HRL, there are three fundamental factors you should further examine:

1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.

2. Valuation: What is HRL worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether HRL is currently mispriced by the market.

3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of HRL? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.