Hershey Co. Faces Stock Decline Amid Mixed Quarterly Performance

Pennsylvania-based The Hershey Company (HSY) manufactures and sells confectionery products and pantry items domestically and globally. With a market cap of $38.8 billion, Hershey operates through its North America Confectionery, North America Salty Snacks, and International segments. Companies valued at $10 billion or more are classified as “large-cap stocks.” Hershey fits this category well, reflecting its substantial size and influence in the confectionery industry, especially known for its chocolates, biscuits, and candies.

Active Investor: FREE newsletter going behind the headlines on the hottest stocks to uncover new trade ideas

However, not all is well for Hershey. The company’s stock has plunged 19.3% from a 52-week high of $211.92 reached on May 14, 2024. Over the past three months, HSY has declined 7.1%, slightly outperforming the Nasdaq Composite, which dropped 11.3% during the same period.

Longer-term performance reveals a more concerning trend. Hershey’s stock fell 13.9% over the past six months and 13% over the last year. This is significant underperformance compared to the Nasdaq’s slight increase of 45 basis points in the past six months and 8.5% gains over the last year.

To illustrate this bearish trend, Hershey has mostly traded below its 200-day moving average since late September 2024. However, it has fluctuated above its 20-day moving average since early February.

On a positive note, Hershey’s stock surged 4.4% following its strong Q4 results released on February 6. The company reported an 8.7% year-over-year increase in net sales, reaching $2.9 billion. Factors contributing to this success included enhanced supply chain productivity, net price realization, and derivative MTM gains, leading to a gross margin expansion of 11.7% to 54%. Additionally, the company reduced its SG&A expenses, resulting in a remarkable 102.3% year-over-year increase in operating profits to $939.1 million. Adjusted EPS for the quarter also saw a solid 33.2% year-over-year increase, reaching $2.69 and surpassing consensus estimates by over 13%.

Despite the recent successes, Hershey has not matched the performance of its competitor Mondelez International, Inc. (MDLZ), which saw a 12.6% decline over the past six months and a 9.4% drop over the past year.

Looking forward, analysts maintain a cautious outlook on Hershey’s long-term potential. Among the 22 analysts covering the stock, the consensus rating is “Hold.” As of the current writing, HSY is trading significantly above its mean price target of $156.67.

On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. For more information, please view 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.