The firm said the producer of chocolate in North America and provider in chocolate and sugar confectionery "has been on a multi-year beat-and-raise cycle on the back of above trend North American chocolate gains, productivity realization and cost relief. Investors have been rewarded with strong earnings growth and rerating."
"We believe this cycle is ending and see risk to expectations and an inflated valuation. We continue to view HSY as a best-in-breed company, but see downside risk for a stock seemingly priced for perfection," Goldman said.
The firm pointed put out that Hershey is trading near all-time highs and near peak valuation, "yet, in our view, is on the cusp of a negative expectation recalibration."
Goldman lowered their FY14-FY16 EPS estimates by 3%-6% to reflect lower sales and margin expectations.
TheStreet Ratings team rates HERSHEY CO as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HERSHEY CO (HSY) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, expanding profit margins, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."