We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
How to Play Hershey (HSY) Ahead of Q1 Earnings Release?
Read MoreHide Full Article
As The Hershey Company (HSY - Free Report) prepares to release its first-quarter 2024 earnings results on May 3, before market open, investors are evaluating the potential opportunities and risks tied to the company. Despite Hershey’s enticing investment profile, underpinned by a strong brand portfolio, customer-centric innovations, pricing leverage and financial resilience, it comes with its set of uncertainties.
Analysts' expectations paint a mixed picture for Hershey’s upcoming release, with the Zacks Consensus Estimate for revenues pegged at $3.1 billion. The top-line projection indicates 4.6% growth on a year-over-year basis. However, the bottom line is expected to witness a year-over-year decline in the first quarter. Although, the consensus mark for quarterly earnings has moved up by a penny to $2.74 per share in the last seven days, it suggests a fall of 7.4% from the year-ago period’s levels.
All said, let's explore the potential rewards and inherent risks of investing in Hershey.
Hershey established itself as a significant player in the confectionery and snack industries, substantiated by brand strength. The company’s iconic brands, like Hershey's and Reese's, enjoy widespread recognition and consumer loyalty, contributing to consistent demand and revenue generation. HSY holds a leading market position in several categories, giving it pricing power and enabling it to drive growth through innovation.
Hershey's has a strong presence not only in the United States but also in international markets, providing opportunities for expansion and diversification of revenue streams. The company is well-equipped to enhance operational efficiency through technology investments like the S/4 implementation.
Despite well-established brands and market presence, Hershey is facing persistent macroeconomic headwinds. Uncertainties, including factors like inflation and changes in consumer spending, are creating challenges. Rising commodity prices, especially for cocoa and sugar, pose a significant threat to the company’s cost structure. However, management is actively seeking ways to mitigate these cost pressures through strategic price adjustments.
Stock Performance & Valuation
Hershey’s shares have registered a modest year-to-date increase of 4%, surpassing the Zacks Food - Confectionery industry's growth rate of 1.1%.
From a valuation perspective, Hershey's forward 12-month price-to-earnings ratio stands at 20.03, above the industry’s average of 16.82. While the premium valuation suggests confidence in HSY’s growth potential, it may also indicate that the stock is fully priced or even overvalued at present. Investors may want to exercise caution before making investment decisions.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Hershey this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) increases the odds of an earnings beat. This is the case here, as HSY carries a Zacks Rank #3 and has an Earnings ESP of +0.87% at present.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Image Source: Zacks Investment Research
Final Words
Hershey, backed by strong fundamentals and market position, has certainly asserted itself as one of the most important companies in the confectionery and snack industries. Of course, nobody knows what the quarterly report will state or how the market will react, but this supermajor is undoubtedly a fantastic stock to retain.
Some More Stocks With the Favorable Combination
Here are three other companies worth considering, as our model shows that these also have the correct combination to beat on earnings this time:
Church & Dwight (CHD - Free Report) currently has an Earnings ESP of +1.00% and a Zacks Rank of 3. The company is likely to register top- and bottom-line increases when it reports first-quarter 2024 numbers. The Zacks Consensus Estimate for Church & Dwight’s quarterly revenues is pegged at $1.49 billion, indicating growth of 4.3% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Church & Dwight’s quarterly earnings of 86 cents suggests a rise of 1.2% from the year-ago quarter’s levels. CHD has a trailing four-quarter earnings surprise of 9.7%, on average.
Coty (COTY - Free Report) currently has an Earnings ESP of +4.23% and a Zacks Rank #3. The company is expected to register top-line growth when it reports third-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COTY’s quarterly revenues is pegged at $1.37 billion, suggesting an increase of 6.6% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for COTY’s quarterly earnings has been unchanged at 6 cents in the past 30 days, suggesting a 68.4% decline from the year-ago quarter’s reported number. COTY has delivered an earnings beat of 115.3%, on average, in the trailing four quarters.
Tyson Foods (TSN - Free Report) currently has an Earnings ESP of +21.15% and a Zacks Rank of 3. The company is likely to register a top-line decline when it reports second-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Tyson Foods’ quarterly revenues is pegged at $13.1 billion, indicating a drop of 0.4% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Tyson Foods’ quarterly earnings of 35 cents suggests an improvement from a loss of 4 cents reported in the year-ago quarter. TSN has a trailing four-quarter negative earnings surprise of 21.1%, on average.
Image: Bigstock
How to Play Hershey (HSY) Ahead of Q1 Earnings Release?
As The Hershey Company (HSY - Free Report) prepares to release its first-quarter 2024 earnings results on May 3, before market open, investors are evaluating the potential opportunities and risks tied to the company. Despite Hershey’s enticing investment profile, underpinned by a strong brand portfolio, customer-centric innovations, pricing leverage and financial resilience, it comes with its set of uncertainties.
Analysts' expectations paint a mixed picture for Hershey’s upcoming release, with the Zacks Consensus Estimate for revenues pegged at $3.1 billion. The top-line projection indicates 4.6% growth on a year-over-year basis. However, the bottom line is expected to witness a year-over-year decline in the first quarter. Although, the consensus mark for quarterly earnings has moved up by a penny to $2.74 per share in the last seven days, it suggests a fall of 7.4% from the year-ago period’s levels.
All said, let's explore the potential rewards and inherent risks of investing in Hershey.
Measuring the Pros & Cons
Hershey Company (The) Price and EPS Surprise
Hershey Company (The) price-eps-surprise | Hershey Company (The) Quote
Hershey established itself as a significant player in the confectionery and snack industries, substantiated by brand strength. The company’s iconic brands, like Hershey's and Reese's, enjoy widespread recognition and consumer loyalty, contributing to consistent demand and revenue generation. HSY holds a leading market position in several categories, giving it pricing power and enabling it to drive growth through innovation.
Hershey's has a strong presence not only in the United States but also in international markets, providing opportunities for expansion and diversification of revenue streams. The company is well-equipped to enhance operational efficiency through technology investments like the S/4 implementation.
Despite well-established brands and market presence, Hershey is facing persistent macroeconomic headwinds. Uncertainties, including factors like inflation and changes in consumer spending, are creating challenges. Rising commodity prices, especially for cocoa and sugar, pose a significant threat to the company’s cost structure. However, management is actively seeking ways to mitigate these cost pressures through strategic price adjustments.
Stock Performance & Valuation
Hershey’s shares have registered a modest year-to-date increase of 4%, surpassing the Zacks Food - Confectionery industry's growth rate of 1.1%.
From a valuation perspective, Hershey's forward 12-month price-to-earnings ratio stands at 20.03, above the industry’s average of 16.82. While the premium valuation suggests confidence in HSY’s growth potential, it may also indicate that the stock is fully priced or even overvalued at present. Investors may want to exercise caution before making investment decisions.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Hershey this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) increases the odds of an earnings beat. This is the case here, as HSY carries a Zacks Rank #3 and has an Earnings ESP of +0.87% at present.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Image Source: Zacks Investment Research
Final Words
Hershey, backed by strong fundamentals and market position, has certainly asserted itself as one of the most important companies in the confectionery and snack industries. Of course, nobody knows what the quarterly report will state or how the market will react, but this supermajor is undoubtedly a fantastic stock to retain.
Some More Stocks With the Favorable Combination
Here are three other companies worth considering, as our model shows that these also have the correct combination to beat on earnings this time:
Church & Dwight (CHD - Free Report) currently has an Earnings ESP of +1.00% and a Zacks Rank of 3. The company is likely to register top- and bottom-line increases when it reports first-quarter 2024 numbers. The Zacks Consensus Estimate for Church & Dwight’s quarterly revenues is pegged at $1.49 billion, indicating growth of 4.3% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Church & Dwight’s quarterly earnings of 86 cents suggests a rise of 1.2% from the year-ago quarter’s levels. CHD has a trailing four-quarter earnings surprise of 9.7%, on average.
Coty (COTY - Free Report) currently has an Earnings ESP of +4.23% and a Zacks Rank #3. The company is expected to register top-line growth when it reports third-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COTY’s quarterly revenues is pegged at $1.37 billion, suggesting an increase of 6.6% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for COTY’s quarterly earnings has been unchanged at 6 cents in the past 30 days, suggesting a 68.4% decline from the year-ago quarter’s reported number. COTY has delivered an earnings beat of 115.3%, on average, in the trailing four quarters.
Tyson Foods (TSN - Free Report) currently has an Earnings ESP of +21.15% and a Zacks Rank of 3. The company is likely to register a top-line decline when it reports second-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Tyson Foods’ quarterly revenues is pegged at $13.1 billion, indicating a drop of 0.4% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Tyson Foods’ quarterly earnings of 35 cents suggests an improvement from a loss of 4 cents reported in the year-ago quarter. TSN has a trailing four-quarter negative earnings surprise of 21.1%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.