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Hershey (HSY) Suffers a Larger Drop Than the General Market: Key Insights

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The latest trading session saw Hershey (HSY - Free Report) ending at $195.89, denoting a -0.3% adjustment from its last day's close. The stock fell short of the S&P 500, which registered a loss of 0.19% for the day. At the same time, the Dow added 0.1%, and the tech-heavy Nasdaq lost 0.54%.

The chocolate bar and candy maker's stock has climbed by 0.84% in the past month, falling short of the Consumer Staples sector's gain of 1.63% and the S&P 500's gain of 3.18%.

Market participants will be closely following the financial results of Hershey in its upcoming release. The company is expected to report EPS of $2.72, down 8.11% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $3.12 billion, up 4.3% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $9.63 per share and a revenue of $11.47 billion, demonstrating changes of +0.42% and +2.71%, respectively, from the preceding year.

It is also important to note the recent changes to analyst estimates for Hershey. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.03% lower within the past month. Hershey is currently a Zacks Rank #3 (Hold).

Investors should also note Hershey's current valuation metrics, including its Forward P/E ratio of 20.4. This valuation marks a premium compared to its industry's average Forward P/E of 19.58.

Investors should also note that HSY has a PEG ratio of 3 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Food - Confectionery stocks are, on average, holding a PEG ratio of 2.55 based on yesterday's closing prices.

The Food - Confectionery industry is part of the Consumer Staples sector. Currently, this industry holds a Zacks Industry Rank of 91, positioning it in the top 37% 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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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