The Hershey Company (HSY), headquartered in Hershey, Pennsylvania, is a global leader in confectionery, known for its iconic chocolate and snack brands that delight consumers worldwide. With a market cap of $30.9 billion, Hershey leverages its legacy of craftsmanship and innovation to deliver high-quality products that cater to evolving consumer preferences. The company is set to release its Q4 earnings before the market opens on Thursday, Feb. 6.
Ahead of the event, analysts expect Hershey to report a profit of $2.38 per share, up 17.8% from $2.02 per share reported in the year-ago quarter. The company has surpassed Wall Street’s adjusted EPS projections in two of the past four quarters while missing on two other occasions.
The company reported an adjusted EPS of $2.34 in the last reported quarter, missing the consensus estimates by 6.4%. Hershey's Q3 performance was driven by weak North America Salty Snacks and international sales, coupled with rising costs and higher corporate expenses.
For fiscal 2024, analysts expect Hershey to report an adjusted EPS of $9.06, down 5.5% from $9.59 in fiscal 2023. In fiscal 2025, its adjusted EPS is expected to drop by 12.8% year-over-year to $7.90.
Hershey’s shares have declined 20.2% over the past 52 weeks, significantly underperforming the broader S&P 500 Index's ($SPX) 26.5% gains and the Consumer Staples Select Sector SPDR Fund’s (XLP) 6.8% returns over the same time frame.
Hershey's shares dropped 2.3% on Nov. 7 following weaker-than-expected Q3 earnings, as the company missed Wall Street's estimates. Revenue fell 1.4% year over year to $2.99 billion, coming in 2.8% below analyst projections. Profitability also declined, with GAAP gross margin slipping to 41.3% from 44.9%, while operating margin decreased to 20.5% from 24.3% in the prior year. Additionally, sales volumes declined by 3%, marking a steeper drop compared to the 0.9% decrease recorded in the same period last year.
The consensus opinion on HSY stock is cautious, with an overall “Hold” rating. Out of the 22 analysts covering the stock, one recommends a “Strong Buy,” 16 suggest a “Hold,” one advises a “Moderate Sell,” and four advocate a “Strong Sell” rating.
The mean price target of $175.23 suggests a potential upside of 14.6% from current price levels.
