Hershey stock underperforms Nasdaq despite quarterly results
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The Hershey Company (HSY), a leading manufacturer of confectionery products with a market capitalization of $38.8 billion, continues to face challenges, reflected in its stock's recent underperformance relative to broader market indices. Known for iconic products such as chocolates, biscuits, and candies, Hershey remains a significant player within the confectionery industry.
Despite recent resilience, Hershey’s stock price has declined significantly, down 19.3% from its 52-week high reached in May 2024. In the last three months alone, HSY shares have dropped by 7.1%, although outperforming the Nasdaq Composite, which has fallen by 11.3% during the same period. The longer-term outlook appears more concerning, with Hershey’s stock declining 13% over the past year, notably underperforming the Nasdaq’s 8.5% gain during the same timeframe.
Technical indicators reinforce this bearish sentiment. Hershey’s stock price has consistently remained below its 200-day moving average since late September 2024, though it recently crossed above the 20-day moving average from early February, indicating short-term volatility and uncertainty.
However, Hershey recently reported impressive fourth-quarter financial results, with net sales growing 8.7% year-over-year to $2.9 billion. Improved margins, driven by derivative gains, higher pricing, volume growth, and cost management, contributed to operating profits soaring by over 100% year-over-year to $939.1 million. Adjusted earnings per share of $2.69 exceeded analyst expectations by more than 13%.
Despite these robust quarterly results, Hershey’s stock performance remains weaker than its industry peer, Mondelez International (MDLZ), which recorded smaller declines of 12.6% over six months and 9.4% over the past year.
Analysts remain cautious regarding Hershey’s future prospects, assigning a consensus "Hold" rating to the stock. Currently trading significantly above the mean analyst price target of $156.67, investors are advised to maintain caution, closely observing Hershey’s operational performance and broader market trends.
Despite recent resilience, Hershey’s stock price has declined significantly, down 19.3% from its 52-week high reached in May 2024. In the last three months alone, HSY shares have dropped by 7.1%, although outperforming the Nasdaq Composite, which has fallen by 11.3% during the same period. The longer-term outlook appears more concerning, with Hershey’s stock declining 13% over the past year, notably underperforming the Nasdaq’s 8.5% gain during the same timeframe.
Technical indicators reinforce this bearish sentiment. Hershey’s stock price has consistently remained below its 200-day moving average since late September 2024, though it recently crossed above the 20-day moving average from early February, indicating short-term volatility and uncertainty.
However, Hershey recently reported impressive fourth-quarter financial results, with net sales growing 8.7% year-over-year to $2.9 billion. Improved margins, driven by derivative gains, higher pricing, volume growth, and cost management, contributed to operating profits soaring by over 100% year-over-year to $939.1 million. Adjusted earnings per share of $2.69 exceeded analyst expectations by more than 13%.
Despite these robust quarterly results, Hershey’s stock performance remains weaker than its industry peer, Mondelez International (MDLZ), which recorded smaller declines of 12.6% over six months and 9.4% over the past year.
Analysts remain cautious regarding Hershey’s future prospects, assigning a consensus "Hold" rating to the stock. Currently trading significantly above the mean analyst price target of $156.67, investors are advised to maintain caution, closely observing Hershey’s operational performance and broader market trends.