The Hershey Company Just Released Its Full-Year Results And Analysts Are Updating Their Estimates
The yearly results for The Hershey Company (NYSE:HSY) were released last week, making it a good time to revisit its performance. It looks like the results were a bit of a negative overall. While revenues of US$8.0b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.2% to hit US$5.46 per share. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Hershey
Taking into account the latest results, the current consensus from Hershey's 14 analysts is for revenues of US$8.21b in 2020, which would reflect a satisfactory 2.9% increase on its sales over the past 12 months. Statutory earnings per share are expected to grow 12% to US$6.16. In the lead-up to this report, analysts had been modelling revenues of US$8.19b and earnings per share (EPS) of US$6.16 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
Analysts reconfirmed their price target of US$151, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Hershey analyst has a price target of US$161 per share, while the most pessimistic values it at US$129. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Hershey's rate of growth is expected to accelerate meaningfully, with forecast 2.9% revenue growth noticeably faster than its historical growth of 1.5%p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 2.9% per year. Hershey is expected to grow at about the same rate as its market, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Hershey going out to 2024, and you can see them free on our platform here..
You can also see whether Hershey is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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