Hershey (HSY)

by | Oct 11, 2022 | Daily Trade Alerts

Hershey is a “sweet choice” with recessions and market pullbacks.

With a dividend yield of 1.85%, it did very well during the recession of 2008, for example.

That year, the company saw sales growth of 3.8% to $5.13 billion. It also produced a profit of $311 million, which was about 45% higher year over year. That proves that even in times of despair, most of us still have a sweet tooth, and guilty pleasures.

Even today, the company continues to do well. In its second quarter, HSY posted:

  • Consolidated net sales of $2,372.6 million, an increase of 19.3%.
  • Organic, constant currency net sales increased 14.1%.
  • Reported net income of $315.6 million and $1.53 per share- an increase of 5.5%.
  • Adjusted earnings per share-diluted of $1.80, an increase of 22.4%.

It also raised its full-year outlook. Net sales growth of 12% to 14% is now expected, as compared to earlier estimates for 10% to 12%. EPS growth of 9% to 12% is expected, as compared to earlier estimates for 8% to 11%. And adjusted EPS growth of 12% to 14% is now expected, as compared to earlier expectations for 10% to 12% growth.

Analysts love the stock, too.

As noted by TheFly.com: Cowen analyst Brian Holland initiated coverage of Hershey with a Market Perform rating and $238 price target. The analyst believes the market has fully priced in the company’s “strong execution, successful diversification, best-in-class margins, pricing power, and lower relative international exposure.” In addition, Holland’s brand reinvestment “should keep a lid on margins.”

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