The Hershey (HSY) Downgraded to Sell at Zacks Investment Research

The Hershey (NYSE:HSY) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research note issued on Wednesday, May 2nd.

According to Zacks, “Hershey’s first-quarter 2018 adjusted earnings came in line with analysts’ expectation, while revenues beat the same. Net sales rose 4.9% year over year. Growth in core chocolate brands and the acquisition of Amplify along with positive foreign currency translation favored the company. Sales in the North America as well as International and Other segment exhibited decent growth. However, cost pressures weighed on margins. Gross margin declined 260 basis points (bps) in the first quarter due to unfavorable sales mix, higher freight and logistics costs as well as incremental investments in trade and packaging. Meanwhile, Hershey’s shares have underperformed the industry year-to-date. Earnings estimate for 2018 and 2019 have moved downward over the last 30 days, which raises concern.”

HSY has been the subject of several other reports. Credit Suisse Group set a $94.00 target price on shares of The Hershey and gave the company a “hold” rating in a research note on Monday, April 16th. Argus downgraded shares of The Hershey from a “buy” rating to a “hold” rating in a research note on Wednesday, May 2nd. Barclays lowered their target price on shares of The Hershey from $110.00 to $107.00 and set an “equal weight” rating for the company in a research note on Friday, February 2nd. UBS downgraded shares of The Hershey from a “neutral” rating to a “sell” rating and lowered their target price for the company from $106.00 to $90.00 in a research note on Tuesday, April 10th. Finally, Susquehanna Bancshares reaffirmed a “neutral” rating and issued a $110.00 price target (up previously from $108.00) on shares of The Hershey in a report on Tuesday, January 30th. Seven analysts have rated the stock with a sell rating, ten have assigned a hold rating and two have given a buy rating to the company’s stock. The Hershey has an average rating of “Hold” and a consensus price target of $103.71.

Shares of HSY opened at $92.60 on Wednesday. The company has a market capitalization of $19.60 billion, a price-to-earnings ratio of 19.27, a PEG ratio of 2.36 and a beta of 0.34. The Hershey has a twelve month low of $92.72 and a twelve month high of $93.51. The company has a debt-to-equity ratio of 2.08, a current ratio of 0.61 and a quick ratio of 0.40.

The Hershey (NYSE:HSY) last announced its earnings results on Thursday, April 26th. The company reported $1.41 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $1.40 by $0.01. The company had revenue of $1.97 billion during the quarter, compared to the consensus estimate of $1.94 billion. The Hershey had a net margin of 13.25% and a return on equity of 113.86%. The Hershey’s revenue was up 4.9% compared to the same quarter last year. During the same period last year, the firm earned $1.31 earnings per share. equities analysts predict that The Hershey will post 5.34 earnings per share for the current fiscal year.

Several institutional investors have recently modified their holdings of the stock. Meadow Creek Investment Management LLC raised its holdings in shares of The Hershey by 3.8% during the fourth quarter. Meadow Creek Investment Management LLC now owns 13,770 shares of the company’s stock worth $1,563,000 after purchasing an additional 510 shares during the last quarter. Palo Capital Inc. raised its holdings in shares of The Hershey by 6.9% during the fourth quarter. Palo Capital Inc. now owns 8,138 shares of the company’s stock worth $924,000 after purchasing an additional 522 shares during the last quarter. Griffin Asset Management Inc. raised its holdings in shares of The Hershey by 3.3% during the fourth quarter. Griffin Asset Management Inc. now owns 16,413 shares of the company’s stock worth $1,863,000 after purchasing an additional 525 shares during the last quarter. Bessemer Group Inc. raised its holdings in shares of The Hershey by 27.6% during the fourth quarter. Bessemer Group Inc. now owns 2,494 shares of the company’s stock worth $283,000 after purchasing an additional 539 shares during the last quarter. Finally, SevenBridge Financial Group LLC raised its holdings in shares of The Hershey by 1.8% during the fourth quarter. SevenBridge Financial Group LLC now owns 31,595 shares of the company’s stock worth $3,586,000 after purchasing an additional 570 shares during the last quarter. 52.81% of the stock is owned by hedge funds and other institutional investors.

About The Hershey

The Hershey Company, together with its subsidiaries, manufactures and sells confectionery products. The company operates through two segments, North America; and International and Other. It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products comprising mints, chewing gums, and bubble gums; pantry items, such as baking ingredients, toppings, beverages, and sundae syrups; and snack items, including spreads, meat snacks, bars and snack bites, mixes, popcorn and protein bars, and cookies.

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