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"We add HSY to the Americas Conviction List as we raise incremental consumer staples exposure to the consumer sleeve of our Conviction List," Goldman Sachs analysts wrote in a June 12 report. "HSY offers best-in-class visibility to outsized revenue and earnings growth over the next two years. Our FY13/FY14E EPS of $3.64/$3.98 are 3%/5% ahead of the Street. Our path to nearly $4 in 2014 anticipates abatement of input cost inflation in FY13, a return to normalized category growth in North America next year and continued momentum in HSY's emerging markets. Incremental upside could stem from (1) cost deflation rather than stagnation and (2) aggressive cash deployment."
Shares of Hershey hit a 52-week high on Monday of $69.98. The stock's 52-week low of $53.83 on Aug. 9.
Hershey trades at an estimated price-to-earnings ratio for next year of 22.86 times; the average for its peers is 19.24. For comparison,
Kraft Foods(KFT) has a lower forward P/E of 16.51.
Nine of the 17 analysts who cover Hershey rated it hold; eight analysts gave the stock a buy rating.
The stock has risen 12.98% year to date.