The Hershey Company (HSY) AI Stock Analysis

• Market Cap: $32.86B
• Dividend Yield: 3.38%
• Average Volume (3M): 1.91M
• Price to Earnings (P/E): 14.9
• Beta (1Y): 0.14
• Revenue Growth: 0.33%
• EPS Growth: 20.17%
• Country: US
• Employees: 18,540
• Sector: Consumer Defensive
• Sector Strength: 94
• Industry: Food Confectioners
• EPS (TTM): 10.90
• Shares Outstanding: 147,949,460
• 10 Day Avg. Volume: 1,572,004
• 30 Day Avg. Volume: 1,913,526
• PEG Ratio: 0.74
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.02
• Price to Cash Flow (P/CF): 9.00
• P/FCF Ratio: 8.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $158.67
• Price Target Upside: -2.42% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 19

Hershey's stock demonstrates solid financial performance with strong revenue and profit growth, though high leverage requires monitoring. The technical indicators show stability, and the valuation is attractive with a reasonable P/E ratio and healthy dividend yield. While earnings call sentiment is mixed due to commodity price challenges, strategic initiatives and leadership changes provide growth potential. Overall, Hershey is positioned well for future growth, with some risks to consider.

Positive Factors

Acquisition and Portfolio Diversification

HSY continues to diversify its snacking portfolio through agreement to acquire LesserEvil, a better-for-you snack manufacturer.

Market Share and Sales Growth

LesserEvil has consistently gained market share, growing sales driven by both price/volume while distribution growth has been strong.

Negative Factors

Cocoa Price Volatility

Cocoa prices remain volatile making visibility low.

Cost Inflation and Pricing Challenges

Cocoa cost inflation is expected to hit significantly in the second half of 2025, requiring substantial pricing adjustments to maintain EPS growth.

Financial Guidance and EPS Outlook

The EPS outlook for 2025 is far below Street expectations, indicating potential challenges for the company.

The Hershey Company Business Overview & Revenue Model

Company Description

The Hershey Company, commonly known as Hershey's, is a leading American multinational corporation in the confectionery industry, headquartered in Hershey, Pennsylvania. Founded in 1894 by Milton S. Hershey, the company is renowned for its chocolate products, including the iconic Hershey's Milk Chocolate Bar, Reese's Peanut Butter Cups, and Hershey's Kisses. In addition to chocolates, Hershey's also produces a range of other confectionery items such as gum, mints, and baking products. The company operates globally, with a strong presence in North America and expanding operations in international markets.

How the Company Makes Money

The Hershey Company generates revenue primarily through the manufacture, marketing, and sale of a broad range of confectionery products. Its key revenue streams include the sale of chocolate and non-chocolate confectionery products to mass merchandisers, grocery stores, drug stores, and convenience stores globally. In addition to direct sales, Hershey's engages in licensing agreements and partnerships to expand its brand reach and product offerings. The company leverages strategic acquisitions to enhance its product portfolio and market presence. Seasonal and holiday-themed products also contribute significantly to Hershey's earnings, as they capitalize on increased consumer demand during these periods.

The Hershey Company Financial Statement Overview

Summary

The Hershey Company has demonstrated strong financial performance, with consistent revenue growth and robust profit margins. However, the balance sheet indicates a relatively high debt-to-equity ratio, reflecting significant leverage. Strong cash flow generation enhances financial flexibility, but attention to leverage and capital expenditure trends is needed for sustained growth.

Income Statement

The Hershey Company has demonstrated strong performance in its income statement with consistent revenue growth over the years. The gross profit margin remains robust, reflecting efficient cost management. In the latest year, the net profit margin improved significantly, indicating enhanced profitability. EBIT and EBITDA margins have also shown positive trends, contributing to the overall strength of the income statement.

Balance Sheet

The balance sheet reflects a strong equity position with a healthy equity ratio. However, the debt-to-equity ratio remains relatively high, indicating significant leverage. The return on equity has been impressive, showcasing the company's ability to generate returns for shareholders, but the high leverage could pose potential risks if not managed carefully.

Cash Flow

The cash flow statement reveals strong operating cash flow, consistently exceeding net income, indicating good cash generation from operations. Free cash flow has grown substantially, supporting the company's ability to invest and return capital to shareholders. The operating cash flow to net income ratio is healthy, showing efficient cash conversion, although capital expenditures have been zero in the latest year, which is unusual and may warrant further investigation.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
11.20B	11.16B	10.42B	8.97B	8.15B
	Gross Profit
5.30B	5.00B	4.50B	4.05B	3.70B
	EBIT
2.90B	2.56B	1.68B	1.61B	1.38B
	EBITDA
3.10B	2.75B	2.38B	2.20B	1.90B
	Net Income Common Stockholders
2.22B	1.86B	1.64B	1.48B	1.28B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
730.75M	401.90M	463.89M	329.27M	1.14B
	Total Assets
12.95B	11.90B	10.95B	10.41B	9.13B
	Total Debt
5.10B	5.13B	5.08B	5.34B	4.78B
	Net Debt
4.37B	4.72B	4.62B	5.01B	3.64B
	Total Liabilities
8.23B	7.80B	7.65B	7.66B	6.89B
	Stockholders Equity
4.71B	4.10B	3.30B	2.76B	2.24B
Cash Flow		Free Cash Flow
2.53B	1.55B	1.81B	1.59B	1.26B
	Operating Cash Flow
2.53B	2.32B	2.33B	2.08B	1.70B
	Investing Cash Flow
-960.31M	-1.20B	-787.38M	-2.22B	-531.28M
	Financing Cash Flow
-1.30B	-1.15B	-1.42B	-681.14M	-499.23M

The Hershey Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 162.60
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HSY, the sentiment is Negative. The current price of 162.6 is below the 20-day moving average (MA) of 168.50, below the 50-day MA of 165.26, and below the 200-day MA of 176.95, indicating a bearish trend. The MACD of 0.27 indicates Positive momentum. The RSI at 50.36 is Neutral, neither overbought nor oversold. The STOCH value of 65.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HSY.

The Hershey Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NSRGY	79 Outperform	$262.52B	21.13	30.10%	2.10%	0.23%	1.13%
HSY	77 Outperform	$32.86B	14.86	50.40%	3.38%	0.33%	20.17%
MDLZ	76 Outperform	$85.77B	19.37	16.69%	2.77%	1.18%	-5.47%
MKC	74 Outperform	$20.51B	26.25	14.73%	2.24%	0.40%	10.89%
CAG	70 Outperform	$12.74B	39.04	3.67%	5.25%	-3.15%	-65.38%
CPB	66 Neutral	$11.57B	22.34	13.43%	3.87%	9.15%	-31.94%
Sector *	62 Neutral	$20.22B	13.99	-16.14%	3.22%	1.15%	3.41%

The Hershey Company Corporate Events

Hershey Approves Retention Awards for Key Executives

On February 19, 2025, The Hershey Company’s Compensation and Human Capital Committee approved retention awards for key executives, including the CFO, Chief Supply Chain Officer, and Chief Technology Officer. These awards, in the form of time-based restricted stock units, are contingent on continued employment until March 19, 2027, and are designed to retain top talent within the company.

Hershey CEO Michele Buck Announces Retirement Plans

On January 10, 2025, The Hershey Company announced the planned retirement of Michele G. Buck, its Chairman, President, and CEO, effective June 30, 2026. To manage the transition, Buck will continue in her roles until a successor is appointed and then serve as a Special Advisor until her retirement. The Company has established a special committee to oversee the search for a new CEO, considering both internal and external candidates. Buck has been instrumental in expanding Hershey into broader snacking categories and driving international growth, marking significant achievements during her tenure. The updated employment agreement outlines her compensation and consulting arrangement through her retirement, emphasizing her continued strategic support during the transition period.

Leadership Changes at The Hershey Company Announced

The Hershey Company announced key leadership changes with the appointment of Veronica Villasenor as President of Salty Snacks and Andrew Archambault as President of U.S. Confection, effective February 3, 2025. Villasenor, a Hershey veteran, succeeds Kristen Riggs and is expected to drive growth in the Salty Snacks division, while Archambault brings extensive experience from Keurig Dr Pepper to oversee Hershey’s iconic confectionery brands, positioning the company for its next phase of growth.