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Hershey (HSY) Laps the Stock Market: Here's Why

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In the latest market close, Hershey (HSY - Free Report) reached $192.79, with a +1.36% movement compared to the previous day. The stock's change was more than the S&P 500's daily gain of 0.76%. Meanwhile, the Dow gained 0.59%, and the Nasdaq, a tech-heavy index, added 1.12%.

The chocolate bar and candy maker's shares have seen an increase of 2.02% over the last month, not keeping up with the Consumer Staples sector's gain of 4.52% and the S&P 500's gain of 2.5%.

Market participants will be closely following the financial results of Hershey in its upcoming release. The company plans to announce its earnings on February 8, 2024. The company is expected to report EPS of $1.95, down 3.47% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $2.74 billion, reflecting a 3.33% rise from the equivalent quarter last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Hershey. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 1.42% fall in the Zacks Consensus EPS estimate. Currently, Hershey is carrying a Zacks Rank of #3 (Hold).

Investors should also note Hershey's current valuation metrics, including its Forward P/E ratio of 19.35. Its industry sports an average Forward P/E of 20.33, so one might conclude that Hershey is trading at a discount comparatively.

One should further note that HSY currently holds a PEG ratio of 2.5. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Food - Confectionery industry currently had an average PEG ratio of 2.44 as of yesterday's close.

The Food - Confectionery industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 110, putting it in the top 44% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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