Hershey Company Prepares for Earnings Report Amid Mixed Analyst Sentiment
The Hershey Company (HSY), based in Hershey, Pennsylvania, is a leading name in global confectionery, recognized for its beloved chocolate and snack products. With a current market cap of $30.9 billion, Hershey combines its tradition of excellence with innovative strategies to meet changing consumer tastes. The company is set to announce its Q4 earnings before the market opens on Thursday, February 6.
Analysts Anticipate Profit Growth but Cautious Outlook for Future Earnings
As the earnings report approaches, analysts forecast that Hershey will report a profit of $2.38 per share, marking a 17.8% increase from $2.02 per share in the same quarter last year. While Hershey has exceeded Wall Street’s adjusted EPS expectations in two of the last four quarters, it fell short in two others.
Recent Performance and Adjusted Earnings Projections
In the previous quarter, Hershey reported an adjusted EPS of $2.34, which missed consensus estimates by 6.4%. The company’s Q3 results were impacted by weak sales in North America, slow international sales, and increasing costs alongside growing corporate expenses.
Looking ahead to fiscal 2024, analysts expect an adjusted EPS of $9.06, indicating a decline of 5.5% from $9.59 in fiscal 2023. The outlook for fiscal 2025 is even more concerning, with predictions of a 12.8% year-over-year decrease to $7.90.
Stock Performance Compared to Industry Benchmarks
Over the past year, Hershey’s shares have fallen by 20.2%, significantly underperforming the broader S&P 500 Index’s 26.5% rise and the Consumer Staples Select Sector SPDR Fund’s (XLP) 6.8% gains during the same timeframe.
Impact of Q3 Earnings on Stock and Analyst Ratings
On November 7, Hershey’s shares dropped 2.3% after the company reported Q3 earnings that fell short of expectations. Revenue decreased by 1.4% year over year to $2.99 billion, missing analyst projections by 2.8%. Profitability metrics worsened, with GAAP gross margin down to 41.3% from 44.9%, and operating margin declining to 20.5% from 24.3% compared to the previous year. Additionally, the sales volume fell by 3%, a sharper decline than last year’s 0.9% drop.
Analyst Ratings and Price Target Insights
Currently, the consensus opinion on HSY stock is cautious, reflected in an overall “Hold” rating. Among the 22 analysts covering the stock, only one recommends a “Strong Buy,” 16 suggest a “Hold,” one advises a “Moderate Sell,” and four recommend a “Strong Sell.”
The average price target of $175.23 indicates a potential upside of 14.6% from current levels.
On the date of publication, Rashmi Kumari did not hold any positions in the securities mentioned in this article. All information and data provided are for informational purposes only. For more details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
