Hershey Company sells chocolate and sugar confectionery products, pantry items, such as baking ingredients, toppings, sundae syrups, and beverages, snack items, including spreads, and gum and mint refreshment products comprising chewing gums and bubble gums. The company was founded in 1894 and is based in Hershey, Pennsylvania.
HSY Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for HSY, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Hershey Co ranked in the 47th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. The most interesting components of our discounted cash flow analysis for Hershey Co ended up being:
Interest coverage, a measure of earnings relative to interest payments, is 9.81; that's higher than 73.23% of US stocks in the Consumer Defensive sector that have positive free cash flow.
HSY's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 28.17% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
CPB, KDP, USNA, THS, and LFVN can be thought of as valuation peers to HSY, in the sense that they are in the Consumer Defensive sector and have a similar price forecast based on DCF valuation.
HERSHEY, Pa., Oct. 1, 2020 /PRNewswire/ -- Halloween will undoubtably look different this year, so Hershey is guaranteeing Halloween fun no matter how you choose to celebrate. Introducing the first-ever Hershey Halloween Squad, a cadre of industry experts that hold the keys to an…