Hershey HSY is a well-known manufacturer of chocolate and non-chocolate confectionery. Analysts have dialed their earnings expectations lower across the board, landing the stock into an unfavorable Zacks Rank #5 (Strong Sell).
The stock also resides in the Zacks Food – Confectionery industry, which is currently ranked in the bottom 4% of all Zacks industries. Let’s take a closer look at how the company currently stacks up.
Hershey
Hershey shares have delivered a sour performance over the last year, down nearly 18% and widely outperforming compared to the S&P 500’s 25% gain. Its latest set of results has provided a little bit of relief, though the EPS outlook remains notably bearish.
Concerning headline figures in the latest print, HSY exceeded both consensus EPS and sales expectations, reflecting growth rates of 9% and 33%, respectively. It’s worth noting that the top and bottom line figures exceeded consensus expectations for the first time over the last three periods.
Below is a chart illustrating the company’s sales on a quarterly basis.
The poor share performance has led to an increased dividend yield, with shares currently paying out 3.6% annually vs. the same for the S&P 500 at 1.2%. While the high yield is certainly a positive from an income-focused standpoint, we’d like to see positive earnings estimate revisions hit the tape, which would signal a big turnaround in sentiment overall.
Bottom Line
Analysts' negative earnings estimate revisions, resulting from weak quarterly results, paint a challenging picture for the company’s shares in the near term.
Hershey HSY is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company’s earnings outlook.
For those seeking strong stocks, a great idea would be to focus on stocks carrying a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy). These stocks sport a notably stronger earnings outlook and the potential to deliver explosive gains in the near term.
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