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Hershey (HSY) Gains But Lags Market: What You Should Know

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Hershey (HSY - Free Report) closed the latest trading day at $170.49, indicating a +0.16% change from the previous session's end. This move lagged the S&P 500's daily gain of 0.64%. On the other hand, the Dow registered a gain of 0.85%, and the technology-centric Nasdaq increased by 0.31%.

The chocolate bar and candy maker's stock has climbed by 7.82% in the past month, exceeding the Consumer Staples sector's gain of 3.65% and the S&P 500's loss of 7.69%.

Analysts and investors alike will be keeping a close eye on the performance of Hershey in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $1.98, reflecting a 35.5% decrease from the same quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $2.84 billion, indicating a 12.65% decrease compared to the same quarter of the previous year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $6.11 per share and a revenue of $11.43 billion, representing changes of -34.79% and +2.02%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Hershey. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.01% downward. Hershey is currently sporting a Zacks Rank of #5 (Strong Sell).

Investors should also note Hershey's current valuation metrics, including its Forward P/E ratio of 27.84. This valuation marks a premium compared to its industry's average Forward P/E of 22.96.

It is also worth noting that HSY currently has a PEG ratio of 6.05. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Food - Confectionery industry had an average PEG ratio of 4.43 as trading concluded yesterday.

The Food - Confectionery industry is part of the Consumer Staples sector. With its current Zacks Industry Rank of 243, this industry ranks in the bottom 4% of all industries, numbering over 250.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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