Hershey Company Stock Intrinsic Value – Hershey’s Margins Under Pressure in 2024, RBC Capital Warns

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The Hershey Company ($NYSE:HSY) is a global leader in the snack food and confectionary industry, producing some of the world’s most beloved chocolate and other sweet treats. The company’s stock has recently come under pressure after RBC Capital Markets analysts cautioned that Hershey could face margin pressures in 2024. This led to the stock dropping in price and investors raising questions about the company’s future outlook. RBC Capital Markets analysts argue that Hershey’s margins could be affected by rising commodity costs and increased competition in the snacks and candy industries. In particular, they warn that Hershey may be forced to discount their prices to remain competitive, which could further reduce their profits. Furthermore, they suggest that Hershey’s profits could be further impacted if their costs of production or distribution rise. As a result of these potential pressures, RBC Capital Markets analysts are recommending that investors take precaution and reduce their exposure to Hershey’s stock. They suggest that investors should consider other stocks with potential for higher returns.

In addition, they advise that investors should pay close attention for any changes in the market that could further affect Hershey’s growth prospects. As such, RBC Capital Markets analysts have warned investors to take precaution and monitor the market for any developments in order to protect their investments.

Price History

On Tuesday, HERSHEY COMPANY stock opened at $190.3 and closed at $190.6, a 1.3% decline from its previous closing price of 193.1. This news comes after analyst firm RBC Capital Markets issued a warning that the company’s profit margins may come under pressure in 2024. The firm has raised concerns that Hershey may not be able to maintain its current market share and pricing power, especially as the confectionary market sees increased competition.

Furthermore, changes in consumer preferences towards healthier alternatives might also further worsen Hershey’s position in the industry. As such, RBC Capital Markets have cautioned investors to keep an eye on developments in the confectionary market in the coming years. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Hershey Company. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Hershey Company. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Hershey Company. More…

Key Ratios Snapshot

Some of the financial key ratios for Hershey Company are shown below. More…

Analysis – Hershey Company Stock Intrinsic Value

At GoodWhale, we have conducted an analysis of the fundamentals of HERSHEY COMPANY. Our proprietary Valuation Line has estimated the intrinsic value of HERSHEY COMPANY shares to be around $233.8. Currently, HERSHEY COMPANY stocks are traded at a price of $190.6, which is a fair price but is undervalued by 18.5%. This presents an opportunity for investors who are looking to buy into the company at a discounted rate. More…

Peers

The Hershey Co. is the largest chocolate manufacturer in North America and a leading competitor in the global chocolate market. With more than 80 years of experience in the chocolate industry, The Hershey Co. has a strong reputation for quality and innovation. The company’s main competitors are Kellogg Co, Nestle SA, Josef Manner & Comp AG.

– Kellogg Co ($NYSE:K)

Kellogg Co is a multinational food manufacturing company headquartered in Battle Creek, Michigan, United States. Kellogg’s produces cereal and convenience foods, including cookies, crackers, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles, and veggie foods. The company’s products are marketed in over 180 countries.

– Nestle SA ($OTCPK:NSRGY)

Nestle is a Swiss food and beverage company with a market cap of 294.41 billion as of 2022. The company has a return on equity of 14.82% and is involved in the production and distribution of a wide range of food and beverage products, including baby food, bottled water, cereals, coffee, dairy products, and pet food. Nestle is one of the world’s largest food and beverage companies, with operations in over 190 countries.

– Josef Manner & Comp AG ($LTS:0F6A)

Joseph Manner & Company AG is a family-owned Austrian confectionery company headquartered in Vienna. It is one of the oldest companies in Austria, founded in 1860. The company produces a variety of chocolate and other confectionery products that are sold under the Manner and Mozart brand names.

Summary

Investors in The Hershey Company have experienced a decline in stock prices after RBC Capital Markets issued a warning about potential margin pressures in 2024. The report released by RBC highlighted the potential risks related to Hershey’s increasing input costs and rising competition, which could significantly impact the company’s long-term profitability. The firm has also noted that Hershey’s current price-to-earnings ratio is relatively expensive compared to the industry average, suggesting that investors may be overvaluing the stock.

In response, investors have sold off their shares since the news was released, with some analysts predicting further declines in the near future. Given the looming uncertainty surrounding Hershey’s financial performance, investors should proceed with caution when evaluating their investments in the company.