بإذنك، نستخدم تحليلات محدودة تراعي الخصوصية لفهم مسارات البحث الفعالة. لا نستخدم أدوات تتبع إعلانية أو تسجيل الجلسات. يمكنك تغيير هذا الخيار في التفضيلات. اقرأ سياسة الخصوصية.
Quote this valuation with its source: Fair value, Potential value and the price at analysis.
FAQ
HSY — frequently asked questions
Is The Hershey Company overvalued?
In our latest published analysis dated 2026-10-04, HSY looks meaningfully undervalued. The price recorded at analysis is 160 USD versus our fair value of 187 USD; the high endpoint is presented separately as potential value of 313 USD. That implies roughly 17.0% upside to fair value at that date.
Our latest published report, analyzed 2026-10-04, gives HSY a fair value of 187 USD and a potential value of 313 USD. The conclusion is triangulated across multiple valuation models and weighted by reliability for The Hershey Company's archetype; it is a dated research output, not a live price.
Should I buy HSY now?
Our latest published rating for HSY, analyzed 2026-10-04, is Buy. The Hershey Company looks meaningfully undervalued at the analysis-date price of 160 USD versus fair value of 187 USD; potential value is 313 USD. This is research for educational purposes, not personalized investment advice.
What are the biggest risks for HSY?
The dedicated bear-case section in our report analyzed 2026-10-04 documents The Hershey Company's material risks, evidence, thresholds, and thesis-invalidation conditions. Scenario-specific explanations remain in that section so the report does not repeat or decontextualize them elsewhere.
What is HSY's rating?
Our latest published rating for HSY, analyzed 2026-10-04, is Buy, with a published moat assessment of 9/10 (Wide). It reflects our fair value of 187 USD, the potential value of 313 USD, and the price recorded at analysis (160 USD).
لم تتم ترجمة هذا التقرير بعد. قم بالتحديث خلال بضع دقائق بمجرد أن تلحق قائمة انتظار الترجمة بالركب.
§1 الملخص التنفيذيEN
الإجابة في 30 ثانيةBuy
السعر مقابل القيمة
Price
$160.19
Fair value
$187.40
Potential value
$312.87
As of
2026-10-02
لماذا قد تنجح الفرضية
Accelerated cocoa agricultural deflation combined with full realization of cumulative price-pack adjustments and dedicated manufacturing automation in salty snacks expanding consolidated gross margin beyond 400 basis points and restoring operating margins above 20%.
ما الذي سيغيّر تقييمنا
Consolidated operating margin remaining below 14.0% over the next 12 months.
We rate The Hershey Company Buy with a Fair value of $187.40 per share, offering 16.99% upside from the report-date price of $160.19 on October 2, 2026.4
We rate Hershey Buy. For an ordinary investor, this rating indicates that the shares provide an attractive entry point into an enduring consumer defensive franchise whose earnings power is recovering from cyclical commodity cost inflation.
The analysis was prepared at a price of $160.19 on October 2, 2026. Against this level, our Fair value of $187.40 implies 16.99% upside, which corresponds to a 14.52% price discount. Under favorable operating conditions and multi-year margin expansion, our Potential value of $312.87 reflects the high-end intrinsic value of the business.
The single key risk that would alter our thesis is a recurrence of agricultural supply deficits in West African cocoa growing regions, which would drive raw ingredient spot prices back toward peak levels. Such a shock would prevent Hershey from delivering its targeted gross margin expansion of just below 400 basis points. A reader would see this risk unfolding if quarterly gross margin gains stall below 200 basis points and consolidated operating margins remain depressed below 14.0% rather than rebounding toward historical norms.5,6
The main reason the investment can work is that Hershey's brand power in North America Confectionery ($9,479.71M FY2025 net sales) generated $2,493.73M in operating profit (26.3% segment margin) even during peak input inflation. As lower-cost cocoa flows into inventory, price-pack architecture execution drives management's guided gross margin expansion of just below 400 basis points in the second half of 2026. This expansion restores consolidated operating income from its FY2025 trough of $1,441.53M, lifting diluted EPS toward consensus estimates of $8.49 in FY2026 and $9.86 in FY2027 and driving cash generation toward our $187.40 Fair value.1,5,6,7
Cocoa Cycle Normalization and 400 Bps Gross Margin Expansion
Management has affirmed gross margin improvement of just below 400 basis points in the back half of 2026 as cocoa supply normalizes and lower-cost beans flow into cost of goods sold. This margin expansion serves as the direct catalyst restoring operating profits from FY2025 trough levels of $1,441.53M (12.33% margin) and driving consensus adjusted EPS toward $8.49 in FY2026 and $9.86 in FY2027.1,5,6
Dominant Confectionery Brand Power and Pricing Realization
Hershey's core confectionery business delivered $9,479.71M in sales and $2,493.73M in operating profit in FY2025, generating a 26.3% segment margin during peak raw material inflation. The strength of brands such as Reese's, Hershey's, and Kit Kat ensures indispensable retail shelf space and resilient consumer demand across wholesale channels.5,7
Expansion into North America Salty Snacks ($1,271.30M FY2025 revenue) and international markets ($941.57M revenue) diversifies revenue beyond mature domestic chocolate consumption. Dedicated manufacturing automation coming online in 2027 will resolve spot logistics friction, sustaining long-term earnings compounding backed by robust cash flow ($2,277.37M operating cash flow and $454.62M capex in FY2025).5,6,7
توصية الدار
We rate Hershey Buy because agricultural supply normalization and price realization are set to expand gross margins by nearly 400 basis points, driving operating earnings recovery from FY2025 trough levels.5
نظرة عامة على الشركة
The Hershey Company is a global confectionery and snacking leader known for its portfolio of chocolate, sweets, mints, and savory snacks. The company owns more than 85 brands worldwide, including iconic names such as Hershey's, Reese's, Kisses, Jolly Rancher, and Ice Breakers, which are marketed, sold, and distributed in approximately 65 countries. In addition to its core chocolate offerings, Hershey has expanded its snacking footprint into salty snacks through brands including SkinnyPop and Dot's Homestyle Pretzels.
Hershey operates through three principal reporting segments: North America Confectionery, North America Salty Snacks, and International. The company's products are sold across grocery, mass merchandise, convenience, and wholesale club channels, with wholesale distributor McLane Company, Inc. accounting for approximately 27% of consolidated net sales in FY2025 as the primary distributor to convenience stores and Walmart.
§2 السيناريو الهبوطيEN
A rigorous stress test evaluates the financial impact of simultaneous operational and market headwinds: persistent agricultural deficits in West Africa preventing cocoa deflation, compounding consumer price elasticity in North America Confectionery, ongoing spot logistics bottlenecks in salty snacks, and discount rate repricing toward consumer staple peer averages. Under this stress scenario, gross margin expansion fails to achieve management's guided 400 bps recovery, holding consolidated operating margins bounded at 14.0% to 14.5% compared to modeled normalization above 17.0%. Confectionery revenue growth decelerates to 1.0% as unit volume contracts by 1.5% under price-pack resistance. Operating income would remain constrained near $1,720M-$1,780M, depressing adjusted EPS below $7.80. Concurrently, raising the cost of equity toward normalized peer levels of 7.63% and contracting the terminal multiple to 14.0x compresses cash-flow-derived valuations by 25% to 32%, testing downside support.
Consumer elasticity headwinds cause sustained confectionery volume contraction
كيف يمكن أن تفشل هذه الأطروحة
Renewed West African cocoa crop deficits re-ignite raw ingredient cost spikes, suppressing operating margin below recovery thresholds
Management guided gross margin expansion to just below 400 bps, predicated on West African harvest normalization. In FY2025, operating income fell to $1,441.53M or 12.33% margin on revenue of $11,692.58M. If agricultural supply deficits recur, operating margin remains depressed below 14.0%.5,6
إشارات الإنذار المبكر للمراقبة
التطورات الخمسة التي قد تضعف أطروحتنا الاستثمارية.
Operating margin remaining below 14.00% would falsify the cocoa cost deflation recovery thesis and indicate an inability to restore normalized profitability.
Hershey's wide economic moat is underpinned by century-old brand intangibles and pervasive retail distribution scale across North America. The company's flagship confectionery franchises—including Reese's, Hershey's, and Kit Kat—dominate the domestic chocolate and candy landscape, commanding leading retail market share and high impulse-purchase loyalty. In FY2025, despite historic cocoa agricultural cost inflation, North America Confectionery generated $9,479.71M in net sales (81.1% of consolidated revenue) and delivered $2,493.73M in operating income, demonstrating exceptional underlying pricing power and category defense.
The structural strength of Hershey's distribution network serves as a formidable barrier to entry. Through its multi-decade wholesale relationship with McLane Company, Inc., which accounted for approximately 27% of consolidated net sales in FY2025, Hershey commands privileged front-end checkout display space and shelf allocation across convenience stores, mass merchants, and wholesale clubs. This pervasive physical availability cannot be replicated by emerging niche brands or private-label competitors, enabling disciplined price-pack architecture adjustments and rapid rollouts of adjacent snacking products such as Dot's Pretzels and SkinnyPop.
Economic profit generation remains robust across commodity cycles. In FY2025, an earnings trough year marked by cocoa cost shocks that reduced consolidated operating income to $1,441.53M, Hershey's ROIC of 10.79% remained well above its computed cost of capital (WACC of 5.56% and moderate Ke of 5.63%). As cocoa supply normalizes and gross margin expands toward management's guided target of just below 400 basis points, return on invested capital is positioned to rebound toward historical 20%+ levels, sustaining substantial economic rent creation across an evaluated 15-year competitive moat duration.
الربح الاقتصادي
Even during peak cocoa input inflation in FY2025, Hershey generated an ROIC of 10.79%, comfortably outpacing its computed weighted average cost of capital of 5.56% and computed moderate cost of equity of 5.63%. As gross margins recover toward management's guided expansion of just below 400 basis points and consolidated operating profit expands from FY2025 baseline EBIT of $1,441.53M, ROIC is projected to normalize above 18-20%, generating persistent economic profit throughout the 15-year moat duration.2,5,6
9/ 10
Wide
Sources of advantage
01Brand Intangibles and Iconic Consumer Mindshare — Hershey holds century-old iconic confectionery trademarks (including Reese's, Hershey's, and Kit Kat) commanding category leadership in U.S. chocolate and candy, generating $9,479.71M in FY2025 North America Confectionery sales and $2,493.73M in segment operating profit despite historic cocoa cost inflation.Wide
02Scale Advantage and Wholesale Retail Distribution Network — Hershey's pervasive scale secures entrenched retail shelf space and checkout aisle placement across North America, with McLane Company accounting for 27% of consolidated net sales as primary distributor to convenience stores, drug stores, wholesale clubs, and mass merchandisers including Walmart.Wide
التهديدات المعروفة للميزة التنافسية
التهديد
الخطورة
الجدول الزمني
التخفيف
Consumer price elasticity and private-label trade-down in core confectionery
medium
12-24 months
Disciplined price-pack architecture execution, promotional optimization, strong consumer brand equity, and pack-size variety across seasonal and permissible formats.5
الصفوف: معدل الخصم (Ke للأرباح؛ WACC للتدفقات النقدية). الأعمدة: النمو النهائي.
القيمة العادلة
تغير المدة (سنوات)
-5
-2
0
+2
+5
القيمة العادلة
185.99 US$
186.85 US$
187.40 US$
187.95 US$
188.75 US$
مدة الميزة التنافسية: 10 سنوات في الحالة الأساسية المميزة. تبقى الافتراضات الأخرى ثابتة.
مرجع الحساسية
The highlighted cell is Fair value when every assumption sits at its base level ($187.40). Each row and column shows what Fair value becomes when one assumption moves.
منحدر التدفق النقدي الحر
Free cash flow to the firm stays positive in the first projected year at $1.5B after modeled reinvestment of $319.7M, with terminal value at 87.5% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
North America Confectionery delivers steady organic sales growth supported by resilient brand equity and price-pack architecture execution
Salty Snacks and international segments contribute accretive volume expansion to enterprise algorithm
Operating tax rate normalizes and disciplined reinvestment supports high cash conversion
The Base case, which carries a probability of 60.0% and projects a target of $187.40 representing an implied return of 17.0% relative to $160.19, reflects the modal operating trajectory. For this outcome to materialize, cocoa ingredient costs must continue to normalize, enabling consolidated gross margin expansion to track management guidance for the second half of the fiscal year. Concurrently, North America Confectionery must maintain steady pricing realization while completing retail inventory replenishment, and Salty Snacks must sustain accretive growth as automated capacity comes online. This scenario would be disconfirmed if agricultural supply deficits re-emerge in West African growing regions or if consumer volume elasticity turns negative following pack-price transitions. Investors will have observable verification through upcoming quarterly margin disclosures and scanner volume reports.
Confectionery volume elasticity remains exceptionally resilient with strong seasonal execution
§7 شجرة قرارات الأرباحEN
تجاوز
Upgrade the rating; Increase portfolio allocation toward upper target bounds, verify that gross margin outperformance stems from structural ingredient deflation rather than temporary shipment timing, and monitor whether Salty Snacks automation remains ahead of schedule.
المُحفِّز: Gross margin expansion exceeding management guidance alongside accelerating organic volume growth in North America Confectionery and Salty Snacks
If gross margin expansion surpasses guided recovery levels and confectionery organic volumes accelerate, operating leverage will drive earnings toward Potential value $312.87, validating the investment thesis relative to $160.19.
متوافق
Maintain Buy; Maintain current target position weighting, confirm that shipment patterns normalize following pack-price adjustments, and track supply chain execution in snacking.
المُحفِّز: Gross margin expansion tracking management guidance with stable confectionery organic sales and completed retail inventory replenishment
Delivery in line with expectations confirms that cocoa ingredient relief is materializing as guided, keeping the company on track toward Fair value $187.40 from $160.19.
دون التوقعات
Downgrade the rating; Pause incremental capital deployment, review whether cocoa supply headwinds reflect persistent structural crop deficits, and reassess downside buffer checkpoints.
المُحفِّز: Gross margin expansion falling materially short of management guidance or confectionery organic volume contracting due to elasticity headwinds
A material shortfall in margin recovery indicates renewed agricultural cost inflation or consumer elasticity pushback, eroding the margin catalyst supporting Fair value $187.40 relative to $160.19.
جودة الأرباح
Earnings quality is anchored by strong operating cash conversion that substantially exceeds reported net income. Cash generation reflects clean working capital management, as trade receivables and inventories normalized following pack-price adjustments and seasonal inventory replenishment. Reported results are free of aggressive capitalization, with depreciation expenses fully covering maintenance capital requirements. High cash conversion validates that underlying operating profits translate directly into distributable cash flow for debt service and dividend payments.
زخم التقديرات
Consensus earnings and revenue estimates have experienced upward revisions following the latest quarterly release. Analysts increased forward annual projections as management reaffirmed substantial gross margin expansion driven by cocoa commodity deflation and completed retail inventory restocking.
الحاليManagement guidance targets expansion just below the four hundred basis points objective for the second half of the year as commodity deflation takes effect.
لماذا يهم
Gross margin recovery reflects the flow-through of lower-cost cocoa inventory and pricing realization. If margin expansion matches or exceeds management guidance, operating income will rebound sharply; conversely, a shortfall signals persistent raw material cost inflation.
Hershey exhibits exceptional cash flow conversion, generating $2,277.37M in operating cash flow during FY2025, well above GAAP net income of $883.26M. Free cash flow normalized following FY2024 levels of $1,925.65M. With FY2025 capex at $454.62M and maintenance capex estimated at ~75% of capital outlays ($340.97M), owner earnings power remains strong at $1,045.99M. High cash conversion insulates dividend obligations and provides self-funding capacity for Dot's manufacturing automation coming online in 2027.5,6
Trough ROIC in FY2025 of 10.79% reflected peak cocoa raw material inflation. As gross margins recover by nearly 400 basis points and EBIT rebounds from $1,441.53M, ROIC expands back toward 18-20% normalized levels.
Trough ROIC of 10.79% in FY2025 comfortably exceeded computed WACC of 5.56% and moderate Ke of 5.63%, generating positive economic spread even at the cyclical trough. Normalized ROIC above 18% provides substantial economic value creation.
أحدث إيرادات11.7 مليار US$معدل النمو السنوي المركب للإيرادات +5.2%
هامش التشغيل12.3%10 فترات مالية
أحدث تدفق نقدي حر1.8 مليار US$FY2025
صافي الدين4.5 مليار US$FY2025
تفصيل قائمة الدخلكيف يتحول حجم الأعمال إلى أرباح مُعلنة.
StockMarketAgent.AI
الإيرادات11.7 مليار US$تكلفة الإيرادات−7.8 مليار US$إجمالي الربح3.9 مليار US$المصروفات التشغيلية−2.5 مليار US$الدخل التشغيلي1.4 مليار US$البنود غير التشغيلية والضرائب−558.3 مليون US$صافي الدخل883.3 مليون US$
بيانات التاريخ المالي
الإيرادات
11,692,576,000 US$
تكلفة الإيرادات
7,769,885,000 US$
إجمالي الربح
3,922,691,000 US$
المصروفات التشغيلية
2,481,163,000 US$
الدخل التشغيلي
1,441,528,000 US$
البنود غير التشغيلية والضرائب
-558,269,000 US$
صافي الدخل
883,259,000 US$
لمحة عن الميزانية العموميةكيفية الاحتفاظ بالأصول المُبلغ عنها وتمويلها في الفترة المحددة.
StockMarketAgent.AI
تكوين الأصولمصادر التمويل
إجمالي الأصول13.7 مليار US$النقد925.9 مليون US$الأصول المتداولة3.6 مليار US$إجمالي الالتزامات9.1 مليار US$الالتزامات المتداولة3 مليار US$حقوق المساهمين4.6 مليار US$
بيانات تفصيل الميزانية العمومية
إجمالي الأصول
13,741,297,000 US$
النقد
925,859,000 US$
الأصول المتداولة
3,588,899,000 US$
إجمالي الالتزامات
9,104,547,000 US$
الالتزامات المتداولة
3,011,896,000 US$
حقوق المساهمين
4,636,750,000 US$
جسر التدفق النقديكيف تحول التدفق النقدي التشغيلي إلى تدفق نقدي حر في FY2025.
StockMarketAgent.AI
تسوية التدفق النقدي التشغيلي
صافي الدخل883.3 مليون US$الإهلاك والإطفاء+503.7 مليون US$التعويض القائم على الأسهم+65.5 مليون US$تعديلات تشغيلية أخرى+824.9 مليون US$التدفق النقدي التشغيلي2.3 مليار US$
تسوية النقد من بداية الفترة إلى نهايتها
النقد في بداية الفترة730.7 مليون US$التدفق النقدي التشغيلي+2.3 مليار US$التدفق النقدي الاستثماري−1.3 مليار US$التدفق النقدي التمويلي−803.4 مليون US$تأثير سعر الصرف−180 ألف US$النقد في نهاية الفترة925.9 مليون US$
2.3 مليار US$ − 454.6 مليون US$التدفق النقدي الحر 1.8 مليار US$
بيانات جسر التدفق النقدي
صافي الدخل
883,259,000 US$
التدفق النقدي التشغيلي الداخل
2,277,367,000 US$
الإهلاك والإطفاء
503,701,000 US$
التعويض القائم على الأسهم
65,460,000 US$
تعديلات تشغيلية أخرى
824,947,000 US$
التدفق النقدي التشغيلي
2,277,367,000 US$
النقد المتاح
3,008,113,000 US$
النقد في بداية الفترة
730,746,000 US$
التدفق الاستثماري الخارج
1,278,717,000 US$
النفقات الرأسمالية
454,622,000 US$
أنشطة استثمارية أخرى
824,095,000 US$
التدفق التمويلي الخارج
803,357,000 US$
صافي إصدار الدين
279,421,000 US$
أرباح الأسهم المدفوعة
1,085,296,000 US$
تأثير سعر الصرف
180,000 US$
النقد في نهاية الفترة
925,859,000 US$
التدفق النقدي الاستثماري
-1,278,717,000 US$
التدفق النقدي التمويلي
-803,357,000 US$
الإيرادات حسب القطاع التشغيليالحصة من إجمالي إيرادات 2025-12-31.
11.7 مليار US$إجمالي الإيرادات
الإيرادات حسب القطاع التشغيليالحصة
North America Confectionery9.5 مليار US$81.1%+4% على أساس سنوي
North America Salty Snacks1.3 مليار US$10.9%+11.9% على أساس سنوي
International941.6 مليون US$8.1%−0.7% على أساس سنوي
المصدر: SEC EDGAR · تاريخ الإيداع 2026-02-17 · SEC EDGAR
بيانات توزيع الإيرادات: الإيرادات حسب القطاع التشغيلي
الإيرادات حسب القطاع التشغيلي
الإيرادات
الحصة
على أساس سنوي
North America Confectionery
9.5 مليار US$
81.1%
4%
North America Salty Snacks
1.3 مليار US$
10.9%
11.9%
International
941.6 مليون US$
8.1%
-0.7%
الإيرادات حسب المنطقةالحصة من إجمالي إيرادات 2025-12-31.
11.7 مليار US$إجمالي الإيرادات
الإيرادات حسب المنطقةالحصة
United States10.3 مليار US$87.7%+4.9% على أساس سنوي
Non Us1.4 مليار US$12.3%+0.7% على أساس سنوي
المصدر: SEC EDGAR · تاريخ الإيداع 2026-02-17 · SEC EDGAR
بيانات توزيع الإيرادات: الإيرادات حسب المنطقة
الإيرادات حسب المنطقة
الإيرادات
الحصة
على أساس سنوي
United States
10.3 مليار US$
87.7%
4.9%
Non Us
1.4 مليار US$
12.3%
0.7%
الإيرادات والأرباحكيف يتحول حجم الأعمال إلى أرباح مُعلنة.
النقد والدينالسيولة المتاحة مقارنة بإجمالي الاقتراض.
توليد النقدالتدفق النقدي التشغيلي مقارنة بالتدفق النقدي الحر.
The Hershey Company (HSY) trades at 17.8x forward earnings against a peer median of 14.0x. Its EV/EBITDA of 13.7x compares with a peer median of 13.7x. The comparison uses 4 peers: Kenvue Inc., The Estee Lauder Companies Inc., The Kroger Co. and Archer-Daniels-Midland Company, as of 2026-10-04.
§10 الصناعة والدورةEN
مرحلة الدورة
Trough
In FY2025, Hershey experienced an earnings trough where operating income dropped to $1,441.53M (12.33% EBIT margin) on revenue of $11,692.58M due to historic cocoa bean price spikes. Capital expenditures were maintained at $454.62M in FY2025 against D&A of $503.70M. As industry benchmark capex datasets are unavailable, the capital cycle view is demand-led and evidence-limited, but company disclosures confirm disciplined capital additions with dedicated automation capacity coming online in 2027.5,6
دورة صعودية
Agricultural deflation across West African cocoa growing regions, healthier global inventory stocks, and realization of nearly 400 basis points of gross margin improvement, alongside automated snacking capacity driving operating leverage in 2027.
دورة هبوطية
Adverse weather (El Niño) and structural crop deficits causing renewed raw ingredient spikes, while cumulative price increases trigger consumer volume elasticity and private-label substitution in mass and convenience retail channels.
الاتجاهات طويلة الأمد
الاتجاه
التأثير
ملاحظة
Snacking occasion growth and permissible indulgence
positive
Consumer shifts toward all-day snacking and permissible treats favor Hershey's expansion into salty snacks (Dot's Pretzels, SkinnyPop), delivering $1,271.30M in FY2025 revenue and expanding beyond confectionery.
Agricultural supply chain volatility and climate exposure
التموضع
Hershey commands leading market share in North American confectionery ($9,479.71M FY2025 revenue), with unmatched distribution through McLane Company (27% of net sales). Unlike commodity processors such as ADM (operating margin of 4.01%), Hershey operates as a branded consumer staple with high pricing power and impulse-purchase positioning.3,7
§11 إدارة المراكزEN
حجم المركز
3-5%
A moderate conviction weighting of 3-5% reflects Hershey's wide economic moat, dominant 81% confectionery revenue base ($9,479.71M in FY2025), and the clear margin recovery catalyst. Sizing remains disciplined at moderate levels due to agricultural commodity volatility in West African cocoa and wholesale channel customer concentration (McLane Company at 27%).7
المخاطر
Position risk is controlled through disciplined initial tranche sizing (3-5% portfolio cap), strict monitoring of quarterly gross margin milestones against management's ~400 bps recovery guidance, and ongoing evaluation of wholesale distributor stability (McLane Company at 27%). The position is buffered by Hershey's wide economic moat, resilient confectionery cash conversion ($2,277.37M FY2025 OCF), and an attractive, secure dividend yield.
شرائح الدخول
المستوى
إجراء
لماذا
$158.00 - $162.00
Initiate initial core position (one-third tranche)
Captures immediate value near the analysis price of $160.19, offering a 14.5% discount to house Fair value of $187.40.
$150.00 - $156.00
Accumulate secondary tranche on technical re-tests
Levels approaching the 52-week low ($156.16) provide an enhanced margin of safety and a exceeding 3.7%, well below historical multiples.
Hershey provides an established dividend track record supported by $2,277.37M in operating cash flow in FY2025 and capital spending of $454.62M. Cash generation easily covers ongoing dividend distributions with room for steady payout growth as operating profit normalizes from FY2025 trough levels.6
Total Return and Value Investors
Buy
At $160.19 on October 2, 2026, Hershey trades at a 14.52% discount to our Fair value of $187.40 and offers 16.99% upside. The stock's forward P/E of 17.76x does not fully reflect the anticipated 400 basis point gross margin rebound and projected consensus EPS recovery to $8.49 in FY2026 and $9.86 in FY2027.1,4,5
Defensive and Quality Compounder Investors
Buy
Hershey's wide economic moat is underpinned by irreplaceable confectionery brands ($9,479.71M FY2025 revenue) generating 26.3% segment operating margins even during severe agricultural input inflation. The company offers defensive consumer staple stability while benefiting from non-confectionery growth in salty snacks.7
§14 التوصية النهائيةEN
إجراء
شراء
We recommend investors initiate or add to positions in The Hershey Company with a Buy rating, based on a Fair value of $187.40 per share that offers 16.99% upside from the report-date price of $160.19 on October 2, 2026.4
The investment case is anchored by the inflecting cocoa agricultural cycle, which unlocks nearly 400 basis points of gross margin recovery, supported by resilient domestic confectionery cash flows and accretive snacking expansion.
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Sources
The records this analysis drew on, as they stood when it was run.
Analyst consensusData as of 2026-10-04 · Published 2026-10-04 · Provider-adjusted · cited for 2 figuresCited in الملخص التنفيذي, وجهات نظر المستثمرين
Market and peer researchData as of 2026-10-04 · Published 2026-10-04 · Provider-adjusted · cited for 2 figuresCited in السيناريو الهبوطي, الصناعة والدورة
Financial statementsData as of 2024-12-31 · Published 2026-10-04 · cited for 1 figureCited in التاريخ المالي
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Logistics bottlenecks and spot freight expenses persist across snacking operations
Cost of capital repricing elevates discount rates across consumer staple peers
The downside case contemplates persistent structural headwinds across the agricultural supply chain and retail distribution channels. In this environment, West African cocoa harvest normalization stalls due to adverse weather or crop disease, forcing the absorption of prolonged raw material cost inflation and limiting gross margin recovery below guided thresholds. Simultaneously, cumulative price-pack increases meet mounting consumer pushback, triggering confectionery volume attrition and market share loss to private-label offerings in convenience and grocery channels. Spot logistics friction and capacity constraints persist in snacking, while international operations face ongoing macro softness. This conditional trajectory would be confirmed if quarterly gross margin expansion fails to achieve recovery milestones or if core confectionery organic sales contract.
FV impact
-2.4%
Operating margin 3 points lower throughout
Trigger
Within 12 months
Cost of capital normalization toward consumer staples peer averages raises discount rates by 200 bps, deflating elevated DCF models
The equity discount rate is currently anchored to computed Ke moderate of 5.6267%, derived from an anomalous 60-month raw beta of 0.0901 with an R-squared of 0.0035. If discount rates reprice toward long-term consumer staple peer norms (Ke 7.0-7.6%), equity DCF valuations (FCFF DCF at $289.18 and Moat Fade at $338.13) contract significantly.2
FV impact
-24.9%
Cost of capital 2 points higher
Trigger
Within 18 months
Terminal valuation de-rating toward packaged food peer medians as confectionery moat advantages and pricing power erode
The terminal P/E multiple of 17.5x assumes premium compounder durability. However, peer forward multiples average 14.03x (ADM at 14.19x and KR at 10.71x). If consumer price elasticity in North America Confectionery ($9,479.71M revenue) deteriorates, terminal valuation multiple compresses to 14.0x.3,5,7
Sustained volume attrition following pack-price transitions indicates that consumer price elasticity has broken brand pricing power, forcing market share loss to private-label alternatives.
الحالي:Positive organic shipment growth expected in H2 2026
Heightened concentration or distributor de-stocking exposes wholesale channel volume to immediate disruption across convenience and Walmart retail accounts.
الحالي:27.0% of consolidated sales in FY2025
تنبيه إذا> 30.0% concentration or unmanaged channel de-stocking
Growth stalling below 1.00% would invalidate the portfolio diversification thesis and fail to provide non-confectionery top-line offset.
الحالي:$1,271.30M in FY2025
تنبيه إذا<= 1.00% annual segment growth
05
International Operating Profitability
International operations slipping into sustained operating losses indicates an inability to pass through cocoa input inflation across macro-sensitive regional markets such as Mexico.
الحالي:$3.32M in FY2025
تنبيه إذا< $0.00M (operating loss in international markets)
Distributor concentration and wholesale channel inventory adjustments
medium
12-18 months
Multi-decade partnership with primary distributor McLane Company (27% of net sales) combined with direct relationships with major retailers including Walmart.7
Persistent West African agricultural cocoa supply shocks and spot price spikes
high
12-24 months
Active commodity hedging, strategic inventory buffers, recipe flexibility, and portfolio diversification into non-chocolate salty snacks ($1,271.30M FY2025 revenue).7
Discounted forecast-period cash flows (39.03 US$) plus discounted terminal value (272 US$) minus signed per current share (22.28 US$) equals the 289 US$ lens value shown above. Negative net debt is , so subtracting it raises value.
The Bull case, assigned a probability of 15.0% and projecting a target of $312.87 for an implied return of 95.3% relative to $160.19, reflects an accelerated operational recovery toward Potential value $312.87. For this trajectory to unfold, West African cocoa harvest yields must rebound ahead of projections, sparking rapid agricultural deflation that drives gross margin expansion beyond guided levels. North America Confectionery price realization must hold without volume elasticity penalties, while seasonal Halloween and Easter shipments outperform historical seasonal averages. Concurrently, automated capacity for Salty Snacks brands like Dot's must ramp ahead of schedule, eliminating spot freight and unlocking substantial operating leverage. This path would be disconfirmed if commodity relief stalls or if retail promotional spending accelerates to protect shelf space. Investors will evaluate this outcome through second-half gross margin realization and segment margin trends.
02
المقياس:
North America Confectionery Organic Volume Growth
الحاليRetail inventory replenishment was completed following the spring pack-price transition, with management anticipating positive organic net sales growth across the second half.
لماذا يهم
Core confectionery represents the vast majority of company sales and operating profits. Tracking volume elasticity following pack-price adjustments reveals whether consumer brand loyalty remains intact against private-label alternatives.
03
المقياس:
Salty Snacks Capacity and Automation Milestones
الحاليInvestments in manufacturing capacity and automation remain on schedule to come online in the coming fiscal year to eliminate spot logistics costs.
لماذا يهم
Surging demand for brands such as Dot's has created spot logistics and freight costs. Bringing dedicated internal automation online eliminates co-packing friction and expands segment operating margins.
04
المقياس:
West African Cocoa Crop Yields and Inventory Rebuilding
الحاليSupply indicators show healthier global inventories and diversified sourcing, although weather patterns continue to warrant close tracking.
لماذا يهم
Global cocoa supply balances determine raw bean spot pricing and future hedging levels. Sustained harvest recovery protects intermediate gross margins from recurring input shocks.
05
المقياس:
Primary Wholesale Distributor Relationship and Channel Throughput
الحاليWholesale order flow and retail stocking levels remain stable following the completion of inventory transitions.
لماذا يهم
Wholesale distribution through McLane Company handles approximately one-quarter of consolidated net sales. Operational continuity ensures consistent shelf presence across convenience and mass retail channels.
Capital allocation prioritizes organic growth and high-return automation initiatives over discretionary share repurchases. In FY2025, Hershey generated $2,277.37M in operating cash flow and funded $454.62M in capital expenditures. CEO Kirk Tanner affirmed that share repurchases remain behind organic capital investments and disciplined M&A choices. Total debt stood at $5,923.31M as of October 2026, supporting an investment-grade balance sheet with manageable leverage (debt weight of 15.54%) that easily covers ongoing dividend distributions.
Core confectionery cash flows absorb transient cost inflation in smaller international and salty snack operations while funding enterprise-wide expansion.
FY2025 capex of $454.62M represented just 3.9% of revenue ($11,692.58M), with reinvestment rate modeled at 18% in FY2026 and 17% in FY2027 to fund Dot's automation.
Modest capital intensity preserves abundant free cash flow for debt service ($5,923.31M total debt) and dividend growth.
The Kroger Co.KR
السعر / القيمة العادلة
القيمة العادلة63.59 US$Report-date price59.03 US$
تاريخ التقييم
الميزة التنافسيةNarrow
بطاقة تقييم الاستثمار52 / 100
Archer-Daniels-Midland CompanyADM
السعر / القيمة العادلة
القيمة العادلة71.52 US$Report-date price80.45 US$
تاريخ التقييم
الميزة التنافسيةNarrow
بطاقة تقييم الاستثمار58 / 100
الهامش
HSY
The Hershey Company
$32.2B
17.8x
2.6x
13.7x
32.8%
—
KVUE
Kenvue Inc.
$33.0B
13.9x
2.1x
11.6x
15.6%
19.4%
EL
The Estee Lauder Companies Inc.
$33.3B
23.5x
2.2x
15.9x
4.7%
7.0%
KR
The Kroger Co.
$34.9B
10.7x
0.2x
7.1x
14.4%
3.0%
ADM
Archer-Daniels-Midland Company
$38.8B
14.2x
0.5x
15.8x
7.6%
4.0%
negative
Concentration of cocoa production in West Africa exposes confectioners to weather patterns and harvest shortfalls, creating periodic gross marginvolatility.
Retail channel consolidation and wholesale intermediary reliance
neutral
Wholesale distribution through major entities like McLane Company (27% of net sales) ensures ubiquitous convenience and mass retail availability, but requires close inventory alignment.
