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Hershey (HSY) closed at $171.76 in the latest trading session, marking a +0.93% move from the prior day. The stock exceeded the S&P 500, which registered a loss of 1.11% for the day. On the other hand, the Dow registered a loss of 0.77%, and the technology-centric Nasdaq decreased by 1.49%.
The chocolate bar and candy maker's stock has dropped by 2.25% in the past month, exceeding the Consumer Staples sector's loss of 4.46% and lagging the S&P 500's gain of 0.4%.
The investment community will be paying close attention to the earnings performance of Hershey in its upcoming release. The company is forecasted to report an EPS of $2.38, showcasing a 17.82% upward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.86 billion, up 7.55% from the year-ago period.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $9.06 per share and a revenue of $11.17 billion, indicating changes of -5.53% and +0.07%, respectively, from the former year.
It is also important to note the recent changes to analyst estimates for Hershey. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.01% lower. As of now, Hershey holds a Zacks Rank of #5 (Strong Sell).
From a valuation perspective, Hershey is currently exchanging hands at a Forward P/E ratio of 18.78. Its industry sports an average Forward P/E of 19.68, so one might conclude that Hershey is trading at a discount comparatively.
One should further note that HSY currently holds a PEG ratio of 4.08. 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. The Food - Confectionery was holding an average PEG ratio of 3.64 at yesterday's closing price.