Hershey (NYSE:HSY) - Share price, News & Analysis

Q: What is the Fair Price of HSY when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

HSY ($225.18) is trading below our estimate of [[fair value]] ($250.45)

HSY fundamental analysis
Snowflake Score
Valuation	1/6
Future Growth	2/6
Past Performance	5/6
Financial Health	3/6
Dividends	5/6

HSY Stock Overview

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.

Rewards

Trading at 10.1% below our estimate of its fair value

Earnings are forecast to grow 4.2% per year

Earnings grew by 13.5% over the past year

Pays a reliable dividend of 1.84%

Risk Analysis

Has a high level of debt

Hershey Competitors

General Mills

NYSE:GIS

US$45.8b

Kraft Heinz

NasdaqGS:KHC

US$47.5b

Tyson Foods

NYSE:TSN

US$29.0b

Hormel Foods

NYSE:HRL

US$27.1b

Price History & Performance

Summary of all time highs, changes and price drops for Hershey
Historical stock prices
Current Share Price	US$225.18
52 Week High	US$231.96
52 Week Low	US$167.80
Beta	0.34
1 Month Change	2.29%
3 Month Change	-0.32%
1 Year Change	26.76%
3 Year Change	44.81%
5 Year Change	108.79%
Change since IPO	2,384.75%

Recent News & Updates

Aug 08

A Look At The Fair Value Of The Hershey Company (NYSE:HSY)

Today we will run through one way of estimating the intrinsic value of The Hershey Company ( NYSE:HSY ) by taking the...

Jul 27

Hershey Q2 2022 Earnings Preview

Hershey (NYSE:HSY) is scheduled to announce Q2 earnings results on Thursday, July 28th, before market open. EPS Estimate is $1.68 (+14.3% Y/Y) and the consensus Revenue Estimate is $2.24B (+12.6% Y/Y). has beaten EPS estimates 100% of the time and has beaten revenue estimates 88% of the time. upward revisions and 10 downward. Revenue estimates have seen 11 upward revisions and 1 downward.

Shareholder Returns

	HSY	US Food	US Market
7D	-0.03%	1.0%	1.3%
1Y	26.8%	5.6%	-11.7%

Return vs Industry: HSY exceeded the US Food industry which returned 5% over the past year.

Return vs Market: HSY exceeded the US Market which returned -11.6% over the past year.

Price Volatility

Is HSY's price volatile compared to industry and market?
HSY volatility
HSY Average Weekly Movement	3.6%
Food Industry Average Movement	6.1%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: HSY is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: HSY's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1894	17,805	Michele Buck	https://www.thehersheycompany.com

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. The company operates through three segments: North America Confectionery, North America Salty Snacks, and International. It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products, including mints, chewing gums, and bubble gums; pantry items, such as baking ingredients, toppings, beverages, and sundae syrups; and snack items comprising spreads, meat snacks, bars and snack bites, mixes, popcorn, and protein bars.

Hershey Fundamentals Summary

How do Hershey's earnings and revenue compare to its market cap?
HSY fundamental statistics
Market Cap	US$46.16b
Earnings (TTM)	US$1.63b
Revenue (TTM)	US$9.72b

28.3x

P/E Ratio

4.7x

P/S Ratio

Is HSY overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
HSY income statement (TTM)
Revenue	US$9.72b
Cost of Revenue	US$5.40b
Gross Profit	US$4.32b
Other Expenses	US$2.69b
Earnings	US$1.63b

Last Reported Earnings

Jul 03, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	7.95
Gross Margin	44.42%
Net Profit Margin	16.76%
Debt/Equity Ratio	170.7%

How did HSY perform over the long term?

See historical performance and comparison

Dividends

1.8%

Current Dividend Yield

46%

Payout Ratio

Does HSY pay a reliable dividends?

See HSY dividend history and benchmarks

When do you need to buy HSY by to receive an upcoming dividend?
Hershey dividend dates
Ex Dividend Date	Aug 18 2022
Dividend Pay Date	Sep 15 2022
Days until Ex dividend	6 days
Days until Dividend pay date	34 days

Does HSY pay a reliable dividends?

See HSY dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is HSY undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for HSY?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for HSY. This is calculated by dividing HSY's market cap by their current preferred multiple.
What is HSY's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$46.16b

HSY key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	5.3x
Enterprise Value/EBITDA	20x
PEG Ratio	6.8x

Price to Earnings Ratio vs Peers

How does HSY's PE Ratio compare to its peers?

HSY PE Ratio vs Peers

The above table shows the PE ratio for HSY vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	20.9x
GIS General Mills	16.9x	3.5%	US$45.8b
KHC Kraft Heinz	31.3x	10.7%	US$47.5b
TSN Tyson Foods	7.2x	-7.8%	US$29.0b
HRL Hormel Foods	28.2x	8.2%	US$27.1b
HSY Hershey	28.3x	4.2%	US$46.2b

Price-To-Earnings vs Peers: HSY is expensive based on its Price-To-Earnings Ratio (28.3x) compared to the peer average (20.9x).

Price to Earnings Ratio vs Industry

How does HSY's PE Ratio compare vs other companies in the US Food Industry?

Price-To-Earnings vs Industry: HSY is expensive based on its Price-To-Earnings Ratio (28.3x) compared to the US Food industry average (17.5x)

Price to Earnings Ratio vs Fair Ratio

What is HSY's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

HSY PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	28.3x
Fair PE Ratio	24.6x

Price-To-Earnings vs Fair Ratio: HSY is expensive based on its Price-To-Earnings Ratio (28.3x) compared to the estimated Fair Price-To-Earnings Ratio (24.6x).

Share Price vs Fair Value

What is the Fair Price of HSY when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: HSY ($225.18) is trading below our estimate of fair value ($250.45)

Significantly Below Fair Value: HSY is trading below fair value, but not by a significant amount.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Hershey forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

4.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: HSY's forecast earnings growth (4.2% per year) is above the savings rate (1.9%).

Earnings vs Market: HSY's earnings (4.2% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: HSY's earnings are forecast to grow, but not significantly.

Revenue vs Market: HSY's revenue (3.4% per year) is forecast to grow slower than the US market (8% per year).

High Growth Revenue: HSY's revenue (3.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: HSY's Return on Equity is forecast to be very high in 3 years time (49.2%).

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Past Performance

How has Hershey performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

13.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: HSY has high quality earnings.

Growing Profit Margin: HSY's current net profit margins (16.8%) are higher than last year (16.5%).

Past Earnings Growth Analysis

Earnings Trend: HSY's earnings have grown by 13.4% per year over the past 5 years.

Accelerating Growth: HSY's earnings growth over the past year (13.5%) exceeds its 5-year average (13.4% per year).

Earnings vs Industry: HSY earnings growth over the past year (13.5%) exceeded the Food industry 5.4%.

Return on Equity

High ROE: Whilst HSY's Return on Equity (56.5%) is outstanding, this metric is skewed due to their high level of debt.

Discover strong past performing companies

Financial Health

How is Hershey's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: HSY's short term assets ($2.4B) do not cover its short term liabilities ($3.3B).

Long Term Liabilities: HSY's short term assets ($2.4B) do not cover its long term liabilities ($4.4B).

Debt to Equity History and Analysis

Debt Level: HSY's net debt to equity ratio (159%) is considered high.

Reducing Debt: HSY's debt to equity ratio has reduced from 342.4% to 170.7% over the past 5 years.

Debt Coverage: HSY's debt is well covered by operating cash flow (44.1%).

Interest Coverage: HSY's interest payments on its debt are well covered by EBIT (17.5x coverage).

Balance Sheet

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Dividend

What is Hershey current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

1.84%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: HSY's dividend (1.84%) is higher than the bottom 25% of dividend payers in the US market (1.5%).

High Dividend: HSY's dividend (1.84%) is low compared to the top 25% of dividend payers in the US market (4.05%).

Stability and Growth of Payments

Stable Dividend: HSY's dividends per share have been stable in the past 10 years.

Growing Dividend: HSY's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (45.6%), HSY's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (50.9%), HSY's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.6yrs

Average management tenure

CEO

Michele Buck (60 yo)

5.42yrs

Tenure

US$16,144,570

Compensation

Ms. Michele Gross Buck has been the Chairman at The Hershey Company since October 11, 2019 and has been its Chief Executive Officer and President since March 1, 2017. Ms. Buck is responsible for all day-to...

CEO Compensation Analysis

Compensation vs Market: Michele's total compensation ($USD16.14M) is about average for companies of similar size in the US market ($USD12.88M).

Compensation vs Earnings: Michele's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: HSY's management team is considered experienced (2.6 years average tenure).

Board Members

Experienced Board: HSY's board of directors are considered experienced (5.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/11 00:00
End of Day Share Price	2022/08/11 00:00
Earnings	2022/07/03
Annual Earnings	2021/12/31