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In the latest trading session, Hershey (HSY) closed at $218.76, marking a -0.57% move from the previous day. This change lagged the S&P 500’s daily gain of 0.25%. Elsewhere, the Dow gained 0.08%, while the tech-heavy Nasdaq added 7.26%.
Coming into today, shares of the chocolate bar and candy maker had lost 5.68% in the past month. In that same time, the Consumer Staples sector lost 2.05%, while the S&P 500 gained 5.73%.
Hershey will be looking to display strength as it nears its next earnings release, which is expected to be February 2, 2023. The company is expected to report EPS of $1.78, up 5.33% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.58 billion, up 10.89% from the prior-year quarter.
It is also important to note the recent changes to analyst estimates for Hershey. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.08% higher. Hershey currently has a Zacks Rank of #2 (Buy).
In terms of valuation, Hershey is currently trading at a Forward P/E ratio of 24.52. For comparison, its industry has an average Forward P/E of 21.92, which means Hershey is trading at a premium to the group.
We can also see that HSY currently has a PEG ratio of 3.2. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The Food – Confectionery industry currently had an average PEG ratio of 3.2 as of yesterday’s close.
The Food – Confectionery industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 37, which puts it in the top 15% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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