The Hershey Co

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HSY : NYSE : Consumer Goods
$106.41 up 0.32 | 0.3%
Today's Range: 105.98 - 106.5
Avg. Daily Volume: 1062000.0
07/20/17 - 11:03 AM ET

Financial Analysis


HERSHEY CO's gross profit margin for the first quarter of its fiscal year 2017 has increased when compared to the same period a year ago. Even though sales increased, the net income has decreased. HERSHEY CO has very weak liquidity. Currently, the Quick Ratio is 0.49 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has remained unchanged from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)1879.681828.81
EBITDA ($mil)512.88413.38
EBIT ($mil)447.93353.46
Net Income ($mil)125.04229.83


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)235.03285.96
Total Assets ($mil)5342.395305.84
Total Debt ($mil)2838.592591.97
Equity ($mil)830.08831.44


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin51.7147.94
EBITDA Margin27.2822.6
Operating Margin23.8319.33
Sales Turnover1.41.37
Return on Assets11.519.38
Return on Equity74.1259.9
Debt Q1 FY17 Q1 FY16
Current Ratio1.10.76
Debt/Capital0.770.76
Interest Expense24.9523.53
Interest Coverage17.9515.03


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)212.75214.13
Div / share0.620.58
EPS0.581.06
Book value / share3.93.88
Institutional Own % n/a n/a
Avg Daily Volume1058196.01039650.0

Valuation


BUY. This stock's P/E ratio indicates a premium compared to an average of 29.35 for the Food Products industry and a significant premium compared to the S&P 500 average of 24.41. For additional comparison, its price-to-book ratio of 26.86 indicates a significant premium versus the S&P 500 average of 3.04 and a significant premium versus the industry average of 4.52. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, HERSHEY CO proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
HSY 36.52 Peers 29.35   HSY 23.11 Peers 20.52

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

HSY is trading at a premium to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

HSY is trading at a premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
HSY 20.17 Peers 19.77   HSY 0.84 Peers 2.26

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

HSY is trading at a premium to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

HSY trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HSY 26.86 Peers 4.52   HSY 26.43 Peers 65.26

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

HSY is trading at a significant premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, HSY is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HSY 2.98 Peers 2.22   HSY 2.93 Peers 3.40

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

HSY is trading at a significant premium to its industry.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

HSY trails its peers on the basis of sales growth

 

 

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