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Hershey (HSY) Gains But Lags Market: What You Should Know

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In the latest trading session, Hershey (HSY) closed at $215.91, marking a +0.25% move from the previous day. The stock lagged the S&P 500's daily gain of 0.99%. Meanwhile, the Dow gained 0.51%, and the Nasdaq, a tech-heavy index, lost 0.31%.

Coming into today, shares of the chocolate bar and candy maker had gained 0.22% in the past month. In that same time, the Consumer Staples sector gained 4.45%, while the S&P 500 gained 7.91%.

Wall Street will be looking for positivity from Hershey as it approaches its next earnings report date. This is expected to be July 28, 2022. In that report, analysts expect Hershey to post earnings of $1.67 per share. This would mark year-over-year growth of 13.61%. Our most recent consensus estimate is calling for quarterly revenue of $2.22 billion, up 11.66% from the year-ago period.

HSY's full-year Zacks Consensus Estimates are calling for earnings of $8.03 per share and revenue of $9.97 billion. These results would represent year-over-year changes of +11.84% and +11.15%, respectively.

Investors might also notice recent changes to analyst estimates for Hershey. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Hershey currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Hershey is currently trading at a Forward P/E ratio of 26.81. For comparison, its industry has an average Forward P/E of 23.04, which means Hershey is trading at a premium to the group.

We can also see that HSY currently has a PEG ratio of 3.5. 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 Food - Confectionery industry currently had an average PEG ratio of 3.5 as of yesterday's close.

The Food - Confectionery industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 100, putting it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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