Hershey Company logged a -0.0% change during today's morning session, and is now trading at a price of $191.5 per share.
Hershey Company returned losses of -11.6% last year, with its stock price reaching a high of $276.88 and a low of $178.82. Over the same period, the stock underperformed the S&P 500 index by -33.0%. As of April 2023, the company's 50-day average price was $188.71. The Hershey Company, together with its subsidiaries, engages in the manufacture and sale of confectionery products and pantry items in the United States and internationally. Based in Hershey, PA, the large-cap Consumer Staples company has 18,075 full time employees. Hershey Company has offered a 2.2% dividend yield over the last 12 months.
Growing Revenues With Increasing Reinvestment in the Business:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $7,791 | $7,986 | $8,150 | $8,971 | $10,419 | $11,160 |
| Revenue Growth | n/a | 2.51% | 2.05% | 10.08% | 16.14% | 7.11% |
| Operating Margins | 21% | 20% | 22% | 23% | 22% | 24% |
| Net Margins | 15% | 14% | 16% | 16% | 16% | 17% |
| Net Income (MM) | $1,178 | $1,150 | $1,279 | $1,478 | $1,645 | $1,909 |
| Net Interest Expense (MM) | -$139 | -$144 | -$149 | -$127 | -$138 | -$150 |
| Depreciation & Amort. (MM) | $295 | $292 | $295 | $315 | $379 | $403 |
| Earnings Per Share | $1.6 | $5.46 | $6.11 | $7.11 | $7.96 | $9.36 |
| EPS Growth | n/a | 241.25% | 11.9% | 16.37% | 11.95% | 17.59% |
| Diluted Shares (MM) | 210 | 209 | 210 | 207 | 205 | 204 |
| Free Cash Flow (MM) | $1,271 | $1,446 | $1,258 | $1,587 | $1,808 | $1,625 |
| Capital Expenditures (MM) | $329 | $318 | $442 | $496 | $519 | $708 |
| Current Ratio | 0.93 | 1.05 | 1.57 | 0.9 | 0.8 | 1.09 |
| Total Debt (MM) | $3,260 | $4,234 | $4,529 | $4,089 | $4,098 | $4,086 |
| Net Debt / EBITDA | 1.39 | 1.98 | 1.63 | 1.59 | 1.38 | 1.19 |
Hershey Company has growing revenues and increasing reinvestment in the business and exceptional EPS growth. Additionally, the company's financial statements display decent operating margins with a stable trend and healthy leverage. However, the firm has positive cash flows. Finally, we note that Hershey Company has just enough current assets to cover current liabilities.
Hershey Company's Valuation Is in Line With Its Sector Averages:
Hershey Company has a trailing twelve month P/E ratio of 20.3, compared to an average of 21.21 for the Consumer Staples sector. Based on its EPS guidance of $9.92, the company has a forward P/E ratio of 19.0. According to the 29.8% compound average growth rate of Hershey Company's historical and projected earnings per share, the company's PEG ratio is 0.68. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 10.8%. On this basis, the company's PEG ratio is 1.88. This suggests that these shares are overvalued. Furthermore, Hershey Company is likely overvalued compared to the book value of its equity, since its P/B ratio of 9.87 is higher than the sector average of 4.12.
There's an Analyst Consensus of Some Upside Potential for Hershey Company:
The 22 analysts following Hershey Company have set target prices ranging from $180.0 to $248.0 per share, for an average of $209.68 with a hold rating. As of April 2023, the company is trading -10.0% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Hershey Company has an average amount of shares sold short because 2.1% of the company's shares are sold short. Institutions own 82.3% of the company's shares, and the insider ownership rate stands at 0.21%, suggesting a small amount of insider investors. The largest shareholder is Blackrock Inc., whose 10% stake in the company is worth $2,894,458,149.
