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Hershey Co (HSY)



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Upturn Advisory Summary
02/11/2025: HSY (1-star) is currently NOT-A-BUY. Pass it for now.
Analysis of Past Performance
Type Stock | Historic Profit -20.28% | Avg. Invested days 36 | Today’s Advisory PASS |
Upturn Star Rating ![]() ![]() | Upturn Advisory Performance ![]() | Stock Returns Performance ![]() |
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Key Highlights
Company Size Large-Cap Stock | Market Capitalization 32.54B USD | Price to earnings Ratio 14.73 | 1Y Target Price 159.53 |
Price to earnings Ratio 14.73 | 1Y Target Price 159.53 | ||
Volume (30-day avg) 1990378 | Beta 0.37 | 52 Weeks Range 138.94 - 206.26 | Updated Date 02/14/2025 |
52 Weeks Range 138.94 - 206.26 | Updated Date 02/14/2025 | ||
Dividends yield (FY) 3.41% | Basic EPS (TTM) 10.72 |
Revenue by Products
Product revenue - Year on Year
Revenue by Geography
Geography revenue - Year on Year
Earnings Date
Report Date 2025-02-06 | When Before Market | Estimate 2.3752 | Actual 2.69 |
Profitability
Profit Margin 19.83% | Operating Margin (TTM) 33.48% |
Management Effectiveness
Return on Assets (TTM) 15.4% | Return on Equity (TTM) 50.4% |
Valuation
Trailing PE 14.73 | Forward PE 26.11 | Enterprise Value 36912072668 | Price to Sales(TTM) 2.9 |
Enterprise Value 36912072668 | Price to Sales(TTM) 2.9 | ||
Enterprise Value to Revenue 3.3 | Enterprise Value to EBITDA 13.98 | Shares Outstanding 147740992 | Shares Floating 145429078 |
Shares Outstanding 147740992 | Shares Floating 145429078 | ||
Percent Insiders 0.58 | Percent Institutions 85.3 |
AI Summary
Hershey Co. (HSY): A Comprehensive Overview
Company Profile:
History and Background:
- Founded in 1894 by Milton Hershey in Pennsylvania.
- Began with the iconic Hershey's chocolate bar, followed by various candy and snack products.
- Acquired various brands over the years, including Reese's, Kit Kat, Twizzlers, and Ice Breakers.
- Today, Hershey Co. is a leading global producer of chocolate, confectionery, and snack products.
Core Business Areas:
- Chocolate: Flagship Hershey's chocolate bars, Kisses, chocolate syrup, and cocoa powder.
- Confectionery: Reese's, York Peppermint Patties, Twizzlers, Jolly Rancher, Ice Breakers.
- Snacks: SkinnyPop popcorn, Pirate's Booty.
Leadership and Structure:
- CEO: Michele Buck
- President and COO: Kristen Riggs
- Diverse board of directors and leadership team with extensive experience in the food and beverage industry.
Top Products and Market Share:
- Top Products: Hershey's chocolate bar, Reese's Peanut Butter Cups, Kisses, Kit Kat, Twizzlers.
- Market Share: Holds the largest share of the US chocolate market (44.5%). Also strong presence in global confectionery market with notable share in key regions.
Comparison to Competitors:
- Performs well against competitors like Mars, Mondelez, and Ferrero in terms of brand recognition and market leadership.
- Faces challenges in terms of product diversification and innovation compared to some competitors.
Total Addressable Market (TAM):
- Global confectionery market estimated at USD 346.79 billion in 2022, expected to reach USD 459.75 billion by 2028 (CAGR 4.7%).
- US chocolate market valued at USD 23.8 billion in 2022.
Financial Performance:
- Revenue: USD 9.429 billion in 2022, USD 9.250 billion in 2021. Steady revenue growth in recent years.
- Net Income: USD 1.595 billion in 2022, compared to USD 1.405 billion in 2021. Increased profitability despite inflationary pressures.
- Profit Margin: Operating margin of 19.61%, indicating healthy profitability.
- EPS: USD 5.59 in 2022, demonstrating consistent earnings.
- Cash Flow: Strong operating cash flow exceeding capital expenditures, supporting reinvestment in business.
- Balance Sheet: Stable balance sheet with manageable debt load.
Dividends and Shareholder Returns:
- Dividend History: Consecutive dividend-paying company for 128 years, with recent payout ratio around 53%.
- Shareholder Returns: 5-year total shareholder return of 46.66%, outperforming S&P 500 index.
Growth Trajectory:
- Historical Growth**: Consistent revenue and earnings growth over the past 5-10 years.
- Future Growth Projections: Expected steady organic growth driven by brand strength, innovation, and emerging markets expansion. Recent acquisition of Dot's Homestyle Pretzels provides additional growth potential.
Market Dynamics:
- Industry Trends: Growing health consciousness drives snacking trends towards healthier offerings. Rising demand for indulgence and convenience in chocolate and sweets continues.
- Hershey's Adaptability: Actively innovating products with healthier ingredients and portion control options. Expanding offerings in fast-growing snack categories.
Competitors:
- Key Competitors: Mars (MARS), Mondelez (MDLZ), Ferrero (private).
- Market Share Comparison: Hershey: 44.5%, Mars: 31.7%, Mondelez: 13.9%, Ferrero: 5.8%.
- Competitive Advantages: Strong brand portfolio, established distribution network, product innovation, financial stability.
- Disadvantages: Limited presence in non-chocolate categories compared to some competitors.
Potential Challenges and Opportunities:
Challenges:
- Supply Chain Disruptions: Continued concerns surrounding cocoa bean sourcing and availability.
- Rising Input Costs: Inflationary pressures could impact profitability margins.
- Changing Consumer Preferences: Evolving consumption trends towards healthier snacking alternatives might require further product adaptation.
Opportunities:
- Growth in International Markets: Potential for further market penetration in high-growth regions like Asia and Latin America.
- Acquisitions and Partnerships: Strategic acquisitions like Dot's Homestyle Pretzels expand product portfolio and increase market reach.
- Product Innovation: Focusing on healthy snacking and portion control can cater to shifting consumer preferences.
Recent Acquisitions:
- January 2023: Dot's Homestyle Pretzels - A move to enter the growing salty snack market with a premium brand.
- May 2021: Lily's Sweets - Acquisition in the fast-growing sugar-free chocolate segment.
- April 2018: Amplify Snack Brands Acquisition of Tyrrells and SkinnyPop for expansion in the US and healthy snack offerings.
AI-Based Fundamental Rating:
7/10:
Hershey Co. boasts strong financial performance, leading market position, and continuous innovation initiatives. Although facing certain challenges like supply chain issues and changing consumer preferences, the company shows strong prospects through brand strength, strategic acquisitions, and focus on growing snack categories.
Sources:
- Hershey Co. (official website)
- Reuters Market Data
- Yahoo Finance
- Statista
- Grand View Research
- S&P Global Market Intelligence
- The Motley Fool
- Seeking Alpha
- The Washington Post
- CNBC
- Forbes
- Zacks
Disclaimer:
The information provided is for general knowledge and educational purposes only, and does not constitute investment advice. This analysis considers publicly available information as of date and may vary over time. It is imperative to conduct due diligence before making any investment decisions.
About Hershey Co
Exchange NYSE | Headquaters Hershey, PA, United States | ||
IPO Launch date 1985-07-01 | Chairman, President & CEO Ms. Michele Gross Buck | ||
Sector Consumer Defensive | Industry Confectioners | Full time employees 18650 | |
Full time employees 18650 |
The Hershey Company, together with its subsidiaries, engages in the manufacture and sale of confectionery products and pantry items in the United States and internationally. The company operates through three segments: North America Confectionery, North America Salty Snacks, and International. It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products, including mints, chewing gums, and bubble gums; protein bars; pantry items, such as baking ingredients, toppings, beverages, and sundae syrups; and snack items comprising spreads, bars, snack bites, mixes, popcorn, and pretzels. The company provides its products primarily under the Hershey's, Reese's, Kisses, Jolly Rancher, Almond Joy, Brookside, barkTHINS, Cadbury, Good & Plenty, Heath, Kit Kat, Payday, Rolo, Twizzlers, Whoppers, York, Ice Breakers, Breath Savers, Bubble Yum, Lily's, SkinnyPop, Pirates Booty, Dot's Homestyle Pretzels, and ONE Bar brands, as well as under the Pelon Pelo Rico, IO-IO, and Sofit brands. It markets and sells its products to wholesale distributors, chain grocery stores, mass merchandisers, chain drug stores, vending companies, wholesale clubs, convenience stores, dollar stores, concessionaires, and department stores. The company exports its products in approximately 80 countries worldwide. The Hershey Company was founded in 1894 and is headquartered in Hershey, Pennsylvania.
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