Must-Know Facts for HSY Investors Today

Hershey Company logged a 1.3% change during today's afternoon session, and is now trading at a price of $192.75 per share.

Hershey Company returned losses of -14.8% 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 -36.5%. As of April 2023, the company's 50-day average price was $188.83. 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 2.3% dividend yield over the last 12 months.

Wider Gross Margins Than the Industry Average of 24.63%:

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%
Gross Margins 46% 45% 45% 45% 43% 45%
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 rapidly growing revenues and increasing reinvestment in the business, strong operating margins with a stable trend, and exceptional EPS growth. The company also benefits from wider gross margins than its peer group, generally positive cash flows, and healthy leverage levels. Furthermore, 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 $9.86, the company has a forward P/E ratio of 19.2. According to the 29.7% compound average growth rate of Hershey Company's historical and projected earnings per share, the company's PEG ratio is 0.69. 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 1.89. 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 9.93 is higher than the sector average of 4.12.

Analysts Give Hershey Company an Average Rating of Hold:

The 22 analysts following Hershey Company have set target prices ranging from $180.0 to $248.0 per share, for an average of $209.0 with a hold rating. As of April 2023, the company is trading -9.7% away from its average target price, indicating that there is an analyst consensus of some upside potential.

Hershey Company has a very low short interest because 1.9% of the company's shares are sold short. Institutions own 82.2% 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 $2,913,427,622.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.