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Hershey (HSY) Stock Sinks As Market Gains: What You Should Know

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Hershey (HSY - Free Report) closed at $225.48 in the latest trading session, marking a -1.21% move from the prior day. This change lagged the S&P 500's 0.66% gain on the day. Elsewhere, the Dow gained 0.61%, while the tech-heavy Nasdaq lost 0.02%.

Heading into today, shares of the chocolate bar and candy maker had gained 0.79% over the past month, outpacing the Consumer Staples sector's loss of 2.55% and the S&P 500's loss of 3.79% in that time.

Hershey will be looking to display strength as it nears its next earnings release. On that day, Hershey is projected to report earnings of $2.07 per share, which would represent a year-over-year decline of 1.43%. Meanwhile, our latest consensus estimate is calling for revenue of $2.61 billion, up 10.44% from the prior-year quarter.

HSY's full-year Zacks Consensus Estimates are calling for earnings of $8.21 per share and revenue of $10.21 billion. These results would represent year-over-year changes of +14.35% and +13.86%, respectively.

It is also important to note the recent changes to analyst estimates for Hershey. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Hershey is holding a Zacks Rank of #2 (Buy) right now.

In terms of valuation, Hershey is currently trading at a Forward P/E ratio of 27.81. This valuation marks a premium compared to its industry's average Forward P/E of 24.69.

Meanwhile, HSY's PEG ratio is currently 3.63. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Food - Confectionery stocks are, on average, holding a PEG ratio of 3.63 based on yesterday's closing prices.

The Food - Confectionery industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 41, putting it in the top 17% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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