The Hershey Company (HSY) AI Stock Analysis

• Market Cap: $33.55B
• Dividend Yield: 3.36%
• Average Volume (3M): 1.77M
• Price to Earnings (P/E): 15.2
• Beta (1Y): 0.16
• Revenue Growth: 0.33%
• EPS Growth: 20.17%
• Country: US
• Employees: 18,540
• Sector: Consumer Defensive
• Sector Strength: 92
• Industry: Food Confectioners
• EPS (TTM): 2.69
• Shares Outstanding: 147,949,460
• 10 Day Avg. Volume: 1,866,888
• 30 Day Avg. Volume: 1,766,715
• PEG Ratio: N/A
• 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: 1.17
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 7.39
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $159.82
• Price Target Upside: -1.99% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 18

Hershey's overall stock score reflects its strong financial performance and attractive valuation. While there are positives in revenue growth and international market performance, technical indicators suggest caution with potential downside risk. The earnings call highlighted challenges in managing cocoa prices and competitive pressures, which could impact future growth.

Positive Factors

Market Share Growth

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

Portfolio Diversification

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

Negative Factors

Cocoa Tariffs

The recently enacted 10% tariff on US imports is expected to increase Hershey's cocoa costs by approximately 10%, impacting the company's 2025 earnings outlook.

Earnings 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, 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; pantry items, such as baking ingredients, toppings, beverages, and sundae syrups; and snack items comprising spreads, meat snacks, bars and snack bites, mixes, popcorn, and protein bars. 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, Paqui, 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 was founded in 1894 and is headquartered in Hershey, Pennsylvania.

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: 163.06
• 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 163.06 is below the 20-day moving average (MA) of 165.16, below the 50-day MA of 169.40, and below the 200-day MA of 175.85, indicating a bearish trend. The MACD of -0.88 indicates Positive momentum. The RSI at 48.07 is Neutral, neither overbought nor oversold. The STOCH value of 28.19 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	$267.91B	22.20	30.10%	2.04%	0.23%	1.13%
HSY	75 Outperform	$33.55B	15.18	50.40%	3.36%	0.33%	20.17%
MDLZ	74 Outperform	$84.34B	19.02	16.69%	2.80%	1.18%	-5.47%
MKC	69 Neutral	$20.03B	25.65	14.73%	2.29%	0.40%	10.89%
CAG	68 Neutral	$12.50B	38.32	3.67%	5.72%	-3.15%	-65.38%
CPB	66 Neutral	$11.37B	21.97	13.43%	4.13%	9.15%	-31.94%
Sector *	64 Neutral	$9.24B	14.61	4.35%	185.59%	3.94%	5.78%

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.