Morningstar

The Hershey Co HSY

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Stock XNYS Rating as of
$193.36 +2.84 (1.49%)
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As of Delayed Price Closed

Company Report

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Competitively-Advantaged Hershey Poised to Navigate the Travails of the Current Industry Backdrop

Erin Lash

We applaud the strategic focus CEO Michele Buck has brought to bear over the past seven years--ramping up investments in its core domestic brands while pulling back in its international arm (high-single-digit percentage of total sales, where we surmise its competitive position lags its global peers). And while cash-constrained consumers’ hankering for confections could be waning (given the more discretionary nature of the product), we don’t think Hershey’s leading position (with more than one third share of the US chocolate aisle versus just low-single-digit marks for lower-priced private-label offerings) has been tarnished.

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Price vs Fair Value

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HSY is trading at a 499% premium.
Price
$193.36
Fair Value
$435.00
Uncertainty
Low
1-Star Price
$878.60
5-Star Price
$348.00
Economic Moat
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Capital Allocation
Dpklpyl

Bulls Say, Bears Say

Bulls

Hershey has intentionally rationalized its fare over the past few years to ensure shelf space and advertising dollars are being allocated to the highest return opportunities.

Bears

Consternation abounds as it pertains to the financial health of the consumer, given the mounting pressure on pocketbooks, particularly for more indulgent and discretionary categories like confectionery and snacking.

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Trading Information

Previous Close Price
$190.52
Day Range
$191.24–193.77
52-Week Range
$178.82–211.92
Bid/Ask
$192.85 / $193.36
Market Cap
$39.11 Bil
Volume/Avg
1.1 Mil / 1.5 Mil

Key Statistics

Price/Earnings (Normalized)
21.58
Price/Sales
3.58
Dividend Yield (Trailing)
2.74%
Dividend Yield (Forward)
2.83%
Total Yield
4.07%

Company Profile

Hershey is a leading confectionery manufacturer in the us (around a $25 billion market), controlling around 36% of the domestic chocolate space (per Euromonitor). Beyond its namesake label, the firm's mix has expanded over the last 85 years and now consists of 100 brands, including Reese's, Kit Kat, Kisses, and Ice Breakers. Hershey's products are sold in about 80 countries, albeit with just a high-single-digit percentage of sales coming from markets outside the us, including Brazil, India, and Mexico. The firm has sought inorganic opportunities to extend its reach beyond its core confection business, adding Amplify Snack Brands and its Skinny Pop ready-to-eat popcorn to its mix, Pirate Brands, and Dot's Pretzels over the past few years.
Sector
Consumer Defensive
Industry
Confectioners
Stock Style Box
Mid Core
Total Number of Employees
20,505
Website
https://www.thehersheycompany.com

Competitors

Valuation

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Metric
HSY
MDLZ
NSRGY
Price/Earnings (Normalized)
 21.5821.3818.13
Price/Book Value
 9.753.587.10
Price/Sales
 3.582.802.55
Price/Cash Flow
 16.3517.5615.07
Price/Earnings
HSY
MDLZ
NSRGY

Financial Strength

Metric
HSY
MDLZ
NSRGY
Quick Ratio
 0.340.240.49
Current Ratio
 0.860.680.85
Interest Coverage
 14.0912.398.30
Quick Ratio
HSY
MDLZ
NSRGY

Profitability

Metric
HSY
MDLZ
NSRGY
Return on Assets (Normalized)
 16.95%6.47%9.83%
Return on Equity (Normalized)
 51.32%16.67%36.95%
Return on Invested Capital (Normalized)
 23.13%10.02%14.65%
Return on Assets
HSY
MDLZ
NSRGY

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1-Day Chart
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Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
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TR
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