The Hershey Company (HSY) AI Stock Analysis

• Market Cap: $35.70B
• Dividend Yield: 3.11%
• Average Volume (3M): 2.18M
• Price to Earnings (P/E): 16.2
• Beta (1Y): 0.12
• Revenue Growth: 0.33%
• EPS Growth: 20.17%
• Country: US
• Employees: 20,030
• Sector: Consumer Defensive
• Sector Strength: 73
• Industry: Consumer Products - Foods
• EPS (TTM): 10.90
• Shares Outstanding: 147,797,120
• 10 Day Avg. Volume: 2,462,080
• 30 Day Avg. Volume: 2,177,011
• PEG Ratio: 0.80
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.23
• Price to Cash Flow (P/CF): 9.60
• P/FCF Ratio: 9.10
• 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: $156.82
• Price Target Upside: -11.42% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 18

Hershey exhibits strong financial health with consistent income growth and robust cash flows, although leverage is a concern. Technical indicators show upward momentum, but caution is advised due to potential overbought conditions. The stock is reasonably valued with a good dividend yield. Recent earnings calls highlight both opportunities in innovation and international markets, as well as challenges in cocoa pricing and competitive pressures. Leadership changes are promising, aligning with strategic growth initiatives.

Positive Factors

Cost Management

The company has good visibility into cocoa costs and physical supply, which could provide stability in the future.

Sales Performance

Retail volumes have not eroded as pricing actions have ramped, which is boosting total sales.

Negative Factors

Cocoa Price Impact

Persistently high cocoa prices and HSY's somewhat subdued price response have led to lowered estimates and target price.

Earnings Expectations

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

Pennsylvania-based The Hershey Co. is one of the largest chocolate manufacturers in the world. The company manufactures and markets chocolate and sugar confectionery products such as cookies, cakes, milkshakes, drinks, and many more that are produced globally. Its brands include Hershey's, Reese's, and Kisses. The company operates through two geographical segments: North America and International and Other.

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

Hershey's financial performance is strong, marked by consistent revenue and profit growth. The income statement shows robust profitability, while the balance sheet is sound but has high leverage. Cash flow generation is excellent, though the lack of recent capital expenditures is unusual.

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: Positive
• Last Price: 177.03
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HSY, the sentiment is Positive. The current price of 177.03 is above the 20-day moving average (MA) of 165.20, above the 50-day MA of 160.71, and below the 200-day MA of 179.38, indicating a neutral trend. The MACD of 5.53 indicates Negative momentum. The RSI at 65.74 is Neutral, neither overbought nor oversold. The STOCH value of 68.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HSY.

The Hershey Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HSY	81 Outperform	$35.70B	16.16	47.11%	3.11%	0.33%	20.17%
NSRGY	79 Outperform	$259.01B	21.08	30.10%	2.10%	0.23%	1.13%
MDLZ	78 Outperform	$84.45B	19.07	17.12%	2.72%	1.18%	-5.47%
MKC	75 Outperform	$22.09B	28.16	14.90%	2.08%	0.92%	15.79%
CPB	70 Outperform	$12.02B	21.96	14.94%	3.72%	6.34%	-30.58%
CAG	66 Neutral	$12.16B	24.89	5.60%	5.37%	-2.00%	-50.02%
Sector *	63 Neutral	$20.85B	13.27	-10.88%	7.48%	1.13%	11.50%

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.