Hershey (HSY) ended the recent trading session at $182.14, demonstrating a +1.94% change from the preceding day's closing price. Elsewhere, the Dow saw an upswing of 1.14%, while the tech-heavy Nasdaq depreciated by 0.8%.
The stock of chocolate bar and candy maker has fallen by 2.47% in the past month, lagging the Consumer Staples sector's gain of 3.53% and the S&P 500's loss of 1.43%.
The upcoming earnings release of Hershey will be of great interest to investors. The company is expected to report EPS of $1.46, up 20.66% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $2.66 billion, indicating a 1.7% growth compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates project earnings of $8.43 per share and a revenue of $12.29 billion, demonstrating changes of +33.6% and +5.07%, respectively, from the preceding year.
Investors should also pay attention to any latest changes in analyst estimates for Hershey. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.29% lower. Hershey currently has a Zacks Rank of #3 (Hold).
Digging into valuation, Hershey currently has a Forward P/E ratio of 21.19. For comparison, its industry has an average Forward P/E of 20.04, which means Hershey is trading at a premium to the group.
It is also worth noting that HSY currently has a PEG ratio of 1.08. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Food - Confectionery was holding an average PEG ratio of 1.08 at yesterday's closing price.
The Food - Confectionery industry is part of the Consumer Staples sector. With its current Zacks Industry Rank of 218, this industry ranks in the bottom 12% of all industries, numbering over 250.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. 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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Hershey Company (The) (HSY): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).