Why Hershey (HSY) Outpaced the Stock Market Today

Hershey (HSY) closed at $220.11 in the latest trading session, marking a +1.39% move from the prior day. This move outpaced the S&P 500's daily gain of 1.01%. Elsewhere, the Dow gained 0.83%, while the tech-heavy Nasdaq added 1.22%.

Shares of the chocolate bar and candy maker have depreciated by 2.47% over the course of the past month, outperforming the Consumer Staples sector's loss of 6.6%, and the S&P 500's loss of 2.86%.

The investment community will be closely monitoring the performance of Hershey in its forthcoming earnings report. The company is expected to report EPS of $2.05, down 1.91% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $3.02 billion, indicating a 7.59% growth compared to the corresponding quarter of the prior year.

HSY's full-year Zacks Consensus Estimates are calling for earnings of $8.21 per share and revenue of $12.25 billion. These results would represent year-over-year changes of +30.11% and +4.78%, respectively.

It is also important to note the recent changes to analyst estimates for Hershey. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.53% higher. Currently, Hershey is carrying a Zacks Rank of #2 (Buy).

Looking at its valuation, Hershey is holding a Forward P/E ratio of 26.45. Its industry sports an average Forward P/E of 16.93, so one might conclude that Hershey is trading at a premium comparatively.

We can also see that HSY currently has a PEG ratio of 1.39. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Food - Confectionery industry stood at 1.58 at the close of the market yesterday.

The Food - Confectionery industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 23, which puts it in the top 10% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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