In the latest trading session, Hershey (HSY) closed at $197.63, marking a -0.83% move from the previous day. The stock’s change was less than the S&P 500’s daily loss of 0.29%. Meanwhile, the Dow experienced a drop of 0.25%, and the technology-dominated Nasdaq saw a decrease of 0.31%.
The chocolate bar and candy maker’s shares have seen an increase of 0.69% over the last month, not keeping up with the Consumer Staples sector’s gain of 3.54% and the S&P 500’s gain of 1.57%.
Investors will be eagerly watching for the performance of Hershey in its upcoming earnings disclosure. The company is expected to report EPS of $2.78, up 6.92% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $3.13 billion, reflecting a 3.39% rise from the equivalent quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $9.49 per share and revenue of $11.36 billion, indicating changes of -1.04% and +1.78%, respectively, compared to the previous year.
Investors might also notice recent changes to analyst estimates for Hershey. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.21% downward. At present, Hershey boasts a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Hershey has a Forward P/E ratio of 21 right now. For comparison, its industry has an average Forward P/E of 19.17, which means Hershey is trading at a premium to the group.
One should further note that HSY currently holds a PEG ratio of 5.79. 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 currently had an average PEG ratio of 3.94 as of yesterday’s close.
The Food – Confectionery industry is part of the Consumer Staples sector. Currently, this industry holds a Zacks Industry Rank of 209, positioning it in the bottom 18% of all 250+ industries.
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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