Hershey Stock Drops Despite Market Gains: Important Facts to Note

Hershey HSY closed the latest trading day at $198.46, indicating a -0.08% change from the previous session's end. The stock's change was less than the S&P 500's daily gain of 0.75%. On the other hand, the Dow registered a gain of 0.58%, and the technology-centric Nasdaq increased by 1%.

Heading into today, shares of the chocolate bar and candy maker had lost 0.99% over the past month, lagging the Consumer Staples sector's gain of 3.54% and the S&P 500's gain of 4.03% in that time.

The investment community will be paying close attention to the earnings performance of Hershey in its upcoming release. The company is expected to report EPS of $2.78, up 6.92% from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $3.13 billion, indicating a 3.39% increase compared to the same quarter of the previous year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $9.50 per share and a revenue of $11.36 billion, indicating changes of -0.94% and +1.78%, respectively, from the former year.

Investors should also note any recent changes to analyst estimates for Hershey. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.11% lower. Hershey is currently a Zacks Rank #4 (Sell).

Looking at its valuation, Hershey is holding a Forward P/E ratio of 20.91. This represents a premium compared to its industry's average Forward P/E of 19.09.

It is also worth noting that HSY currently has a PEG ratio of 5.77. 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 average PEG ratio for the Food - Confectionery industry stood at 3.92 at the close of the market yesterday.

The Food - Confectionery industry is part of the Consumer Staples sector. Currently, this industry holds a Zacks Industry Rank of 234, positioning it in the bottom 8% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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