Hershey (HSY) Falls More Steeply Than Broader Market: What Investors Need to Know

In the latest close session, Hershey (HSY) was down 1.09% at $173.15. The stock's performance was behind the S&P 500's daily loss of 0.38%. On the other hand, the Dow registered a loss of 0.51%, and the technology-centric Nasdaq decreased by 0.29%.

The chocolate bar and candy maker's shares have seen a decrease of 4.35% over the last month, not keeping up with the Consumer Staples sector's gain of 0.5% and the S&P 500's gain of 2.08%.

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 $2.11, reflecting a 62.31% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.26 billion, up 2.34% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $8.49 per share and a revenue of $12.29 billion, indicating changes of +34.55% and +5.13%, respectively, from the former year.

It is also important to note the recent changes to analyst estimates for Hershey. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming 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, 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 0.07% higher. At present, Hershey boasts a Zacks Rank of #3 (Hold).

Looking at its valuation, Hershey is holding a Forward P/E ratio of 20.63. For comparison, its industry has an average Forward P/E of 20.57, which means Hershey is trading at a premium to the group.

Investors should also note that HSY has a PEG ratio of 1.38 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. HSY's industry had an average PEG ratio of 1.38 as of yesterday's close.

The Food - Confectionery industry is part of the Consumer Staples sector. With its current Zacks Industry Rank of 98, this industry ranks in the top 40% of all industries, numbering over 250.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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