Hershey (HSY) Gains But Lags Market: What You Should Know

Hershey (HSY) closed the most recent trading day at $224.56, moving +1.86% from the previous trading session. This change lagged the S&P 500's 2.59% gain on the day. At the same time, the Dow added 2.66%, and the tech-heavy Nasdaq gained 0.11%.

Heading into today, shares of the chocolate bar and candy maker had lost 1.6% over the past month, outpacing the Consumer Staples sector's loss of 8.02% and the S&P 500's loss of 9.22% in that time.

Investors will be hoping for strength from Hershey as it approaches its next earnings release. The company is expected to report EPS of $1.69, down 19.52% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.61 billion, up 10.43% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.21 per share and revenue of $10.22 billion, which would represent changes of +14.35% and +13.86%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Hershey. These revisions help to show the ever-changing nature of near-term business trends. 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. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Hershey is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, Hershey currently has a Forward P/E ratio of 26.86. This valuation marks a premium compared to its industry's average Forward P/E of 24.29.

Also, we should mention that HSY has a PEG ratio of 3.5. 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. The Food - Confectionery industry currently had an average PEG ratio of 3.5 as of yesterday's close.

The Food - Confectionery industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 35, which puts it in the top 14% of all 250+ industries.

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.

To follow HSY in the coming trading sessions, be sure to utilize Zacks.com.

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