Spam Up!! Deutsche Bank Rates Hormel A Sell After Weaker Than Expected Earnings (HRL)

Deutsche Bank has a Sell rating and $38 price target on Hormel Foods Corporation HRL after the maker of Spam reported earnings. In a note to clients, Deutsche Bank writes, "Hormel reports opr. F3Q10 (end Jul) EPS of $0.63 vs. our recently revised estimate of $0.72 and consensus of $0.60. Below the line, lower than expected net interest and investment income accounted for $0.03 relative to our forecast, while higher shares outstanding accounted for $0.01. The primary segment deviation came from lower than expected Grocery profits and slightly lower JOTS profits. Grocery margins of 10.9% trailed our 14.3% assumption and represents a 500 bps. YoY decline and a 580 bps. sequential decline." Shares of Hormel Foods Corporation are currently trading up this morning, up 9 cents to $43.46 in a broadly weaker market.