Hormel Foods Corp (HRL) is overvalued and Kraft Heinz Co (KHC) is overvalued.
Both trade above our estimate of their intrinsic value. HRL is the closer of the two: -27%, against -67% for KHC.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 7.0% (average of 3 methods) values the shares at $16.02; the price of $20.33 is 27% above that value, and 83% of that value comes from beyond year five.
Leak Score 0/100 on 2 of 12 signals
Its through-the-cycle earnings (12.8% median margin), capitalised at 6.9% with no growth, values the shares at $14.36; the price of $24.00 is 67% above that value.
Leak Score 23/100 on 8 of 12 signals
| Metric | HRL | KHC |
|---|---|---|
| Verdict | Overvalued | Overvalued |
| Price | $20.33 | $24.00 |
| Intrinsic value | $16.02 | $14.36 |
| Margin of safety | -27% | -67% |
| Leak Score | 0/100 (2/12) | 23/100 (8/12) |
| Market cap | $11.2B | $28.5B |
| Revenue growth, 5 years | 4.7% | -1.0% |
| Operating margin | 7.4% | 17.1% |
| Net margin | 2.8% | -13.6% |
| Return on equity | 4.3% | -8.8% |
| Debt to equity | 0.36 | 0.53 |
| P/E | 32.7x | — |
| Forward P/E | 12.9x | 11.6x |
| P/B | 1.4x | 0.8x |
| Dividend yield | 5.8% | 6.7% |