Friday’s markets got a jolt of optimism when Federal Reserve Chair Jerome Powell, speaking at the Jackson Hole symposium, dropped what might be the week’s most market-friendly hint. A possible interest-rate cut could be on the table as soon as September, particularly if signs of a cooling job market continue to mount.
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Powell described the labor market in a kind of “curious balance,” where both hiring demand and workforce supply are slowing, suggesting things could shift quickly and warrant a policy tweak. New York. Though he stopped short of a commitment, markets leaped at the comment, pricing in a September easing and sending stocks higher.
With interest rates potentially easing, J.P. Morgan analyst Thomas Palmer sees a compelling theme for investors, and this time, it involves food.
“A lower interest rate environment could send valuation multiples higher. Food stocks trade at historically depressed levels and also at historically high dividend yields. In food, higher valuation multiples have historically correlated with lower interest rates,” Palmer opined.
Palmer goes on to pick out two food stocks that are likely to bring in returns in a lower interest rate environment. We’ve opened up the TipRanks database to examine these names and see how they line up with Wall Street’s consensus. Let’s dive in.
Mondelez International(MDLZ)
We’ll start with one of the major names in the snack food and confectionery niche, Mondelez International. This $82 billion giant of the packaged food industry keeps its headquarters in Chicago, Illinois – long a hub of the commodities trade – and traces its roots back a century. Today, the company boasts a worldwide footprint, with production, distribution, and marketing operations employing some 91,000 people in more than 80 countries.
That vast footprint has translated into significant revenues. Last year, Mondelez generated some $36 billion in global net sales, powered by its leadership in the global snacks market. The company claims the top global position in cookies and crackers and holds the second spot in chocolate. Alongside these categories, Mondelez also maintains meaningful positions in gum, candy, cheeses, and grocery products, and is actively expanding its baked snack offerings and powdered beverages.
Behind those numbers stands a powerhouse portfolio of brands that resonate with consumers worldwide. From Cadbury and Toblerone to Ritz, Triscuit, and Tang, Mondelez products reach customers in over 150 countries, making it hard to find a market where one of its labels isn’t a household name.
The company’s connection with consumers is further underscored by its annual State of Snacking report. The latest findings reveal that 91% of global consumers snack daily, 81% pay close attention to the sensory experience, and nearly three-quarters say they can’t imagine life without chocolate. These insights not only highlight the resilience of snacking demand but also help shape Mondelez’s strategy as it tailors products to evolving preferences.
In its Q2 2025 report, Mondelez posted revenues of $8.98 billion, up 7.7% year-over-year and topping forecasts by $142 million. While non-GAAP EPS slipped 12% from last year, the 73-cent result still came in 5 cents ahead of consensus.
Meanwhile, during the first half, Mondelez returned $2.9 billion to shareholders – and in the Q2 report, it announced a 6% increase to its regular dividend payment. The increased dividend now stands at 50 cents per common share and is scheduled for payout on October 14. At the annualized rate of $2 per share, the dividend yields 3.2%.
J.P. Morgan’s Thomas Palmer is taking notice. The analyst highlights Mondelez’s global scale, exposure to resilient snacking categories, and strong M&A track record as drivers of above-peer growth.
“Over time, we look for MDLZ’s volume and organic sales growth to outpace those of most of its US food peers, driven by MDLZ’s global footprint and category exposure (snacking). The company has an excellent M&A track record, in our view, buying businesses that it can scale through its distribution and manufacturing platforms. Absent M&A, it is likely to enhance EPS growth via share repurchases. Cocoa inflation is presenting a headwind to MDLZ’s current earnings growth; however, we view this as a temporary issue and look for growth to soon inflect higher, driven by easing inflation (per futures) and continued pricing actions,” Palmer opined.
Quantifying this stance, Palmer rates MDLZ as Overweight (i.e., Buy) with a $75 price target that indicates potential for an 18% upside in the next 12 months. (To watch Palmer’s track record, click here)
The Street largely agrees. Mondelez shares carry a Strong Buy consensus rating, supported by 14 Buys and 4 Holds. With shares recently trading at $63.41 and the consensus price target at $75.06, analysts are broadly aligned with JPMorgan’s stance. (See MDLZ stock forecast)
Hormel Foods(HRL)
Next up is Hormel Foods, one of the most recognizable names in the US food sector. The company was founded in 1891 and still maintains its headquarters in its hometown of Austin, Minnesota. Hormel’s primary focus has always been on meats and meat products, and the company is best known for two innovations: it was the first food producer in the US to market canned ham, and it was the inventor of SPAM. To this day, Hormel’s product portfolio is still centered on meat, with an emphasis on pork products such as bacon, sausages, and lunch meats.
Food is big business, and Hormel is a $15.75 billion player in it. The company takes pride in its reputation as an innovator and notes that 40 of its brand names are considered #1 or #2 in their categories. From its Minnesota home, Hormel maintains a global footprint and markets and sells products in 80-plus countries around the world. Hormel is especially active in East Asia and does sizable business in China, Japan, the Philippines, and South Korea.
Some of Hormel’s brand names are immediately recognized in the American consumer scene – in addition to SPAM, the company has Hormel Canned Meats, Dinty Moore, and Black Label Bacon. The company has expanded its product lines somewhat beyond meat and is the owner-distributor of Chi-Chi’s salsas and Skippy peanut butter. The company claims that it produces more than 90 million jars of Skippy every year, a testament to both the popularity of the product and Hormel’s ability to capitalize on that.
Hormel generated $2.9 billion worth of sales in its fiscal 2Q25, the three months ending on April 27 this year. That total was flat year-over-year and missed the estimates by $4.5 million. At the bottom line, Hormel’s non-GAAP EPS of $0.35 was a penny better than had been expected. The company realized cash flow from operations in the quarter of $56 million.
Like Mondelez above, Hormel has a reputation as a good dividend stock. The company returned $159 million to shareholders during fiscal Q2 through its dividend payment, which is currently set at 29 cents per share. The dividend was last paid on August 15. Its $1.16 annualized rate gives a forward yield of 4%.
While Hormel’s second-quarter results were hardly gangbusters, analyst Palmer sees potential in the stock.
“We think it is a tactically good time to own HRL shares. HRL’s pork and turkey-centric portfolio seems to be well positioned against current health trends that lean into protein and away from products with artificial ingredients. We see potential earnings upside in 3Q25, with price increases on ground turkey, an improved Planters supply chain, and rabbi trust gains more than offsetting potential margin pressure from rising pork costs. For FY26, even if HRL’s productivity program does not net out to the operating profit improvement that HRL has guided to, we look for earnings growth to be driven by a continued recovery at Planters and higher whole turkey prices,” Palmer explained.
These comments support Palmer’s Overweight (i.e., Buy) rating on HRL, and his $34 price target suggests that shares will gain 16% by this time next year.
Overall, there are 6 recent analyst reviews here, and their even split of 3 Buys and 3 Holds gives HRL a Moderate Buy consensus rating. The stock last closed at $29.25, and its $33.17 average price target implies a 12-month upside potential of 13%. (See HRL stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
