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Here's Why Hershey (HSY) Gained But Lagged the Market Today

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Hershey (HSY - Free Report) ended the recent trading session at $170.26, demonstrating a +0.78% swing from the preceding day's closing price. The stock lagged the S&P 500's daily gain of 1.09%. Meanwhile, the Dow experienced a rise of 1.18%, and the technology-dominated Nasdaq saw an increase of 1.03%.

The chocolate bar and candy maker's shares have seen a decrease of 3.44% over the last month, not keeping up with the Consumer Staples sector's loss of 2.12% and the S&P 500's loss of 0.71%.

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 $2.38, reflecting a 17.82% increase from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $2.86 billion, up 7.55% from the year-ago period.

HSY's full-year Zacks Consensus Estimates are calling for earnings of $9.07 per share and revenue of $11.17 billion. These results would represent year-over-year changes of -5.42% and +0.07%, respectively.

Investors should also pay attention to any latest changes in analyst estimates for Hershey. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.1% higher. Right now, Hershey possesses a Zacks Rank of #5 (Strong Sell).

Digging into valuation, Hershey currently has a Forward P/E ratio of 18.62. This valuation marks a discount compared to its industry's average Forward P/E of 19.56.

It's also important to note that HSY currently trades at a PEG ratio of 4.04. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Food - Confectionery industry stood at 3.62 at the close of the market yesterday.

The Food - Confectionery industry is part of the Consumer Staples sector. This industry, currently bearing a Zacks Industry Rank of 236, finds itself in the bottom 6% echelons of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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