Is Hershey (HSY) Pricing Look Stretched After Recent Consumer Staples Reassessment

• If you are wondering whether Hershey at around US$179 a share is a fair deal or a stretch, you are not alone in trying to pin down what the stock is really worth today.
• The share price has slipped by 1.6% over the last week and 1.7% over the last month, while the 1 year return sits at 11.9% and the 5 year return at 35.2%, which gives a mixed picture of recent momentum and risk perception.
• Recent coverage around Hershey has focused on how consumer staples names are being reassessed as investors weigh defensive brands against changing spending patterns. Hershey often features in that conversation as a long established confectionery player. This context is important when thinking about whether the market price reflects the underlying business or simply broad sector sentiment.
• Right now Hershey scores 0 out of 6 on our valuation checks, which you can see in detail in its valuation score. Next we will walk through the common valuation methods investors use and then finish with a way of looking at value that can give you a fuller picture.

Hershey scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Hershey Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes the cash a business is expected to generate in the future, then discounts those projections back into today’s dollars to arrive at an estimate of what the company might be worth now.

For Hershey, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about $1.59b. Analysts have provided explicit free cash flow estimates out to 2028, with Simply Wall St extrapolating those inputs further out to 2035 using its own assumptions. For example, the model includes projected free cash flows such as $1,437.28m in 2026 and $1,487m in 2028, all expressed in US$ and then discounted back to today.

Bringing all those discounted cash flows together gives an estimated intrinsic value of about $142.55 per share. Against a current share price around $179, the DCF output suggests Hershey trades at roughly a 25.8% premium to this estimate, which points to the shares looking expensive on this specific cash flow model.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Hershey may be overvalued by 25.8%. Discover 877 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Hershey.

Approach 2: Hershey Price vs Earnings

For a profitable company like Hershey, the P/E ratio is a useful shorthand because it links what you pay for each share directly to the earnings that back it. Investors usually accept a higher or lower P/E depending on what they expect for future growth and how risky they think those earnings are, so there is no single “right” number that fits every business.

Hershey currently trades on a P/E of 26.7x. That sits above the Food industry average of 19.8x and also above the peer group average of 23.3x, which points to the market assigning a richer price tag than these broad benchmarks.

Simply Wall St’s Fair Ratio for Hershey is 21.8x. This is a proprietary estimate of what a more suitable P/E might be once you factor in elements like earnings growth, industry, profit margins, company size and risk profile. Because it blends these company specific inputs, the Fair Ratio can be more tailored than a simple comparison with peers or the industry alone. Setting 21.8x against the actual 26.7x suggests the shares are trading above this fair value marker.

Result: OVERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1449 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Hershey Narrative

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St’s Community page you can use Narratives, where you set out your story for Hershey, link that story to your own forecasts for revenue, earnings and margins, see the fair value that results from those numbers, and then compare it with the current price so you can judge whether it looks like a buy or a sell to you. The fair value updates automatically as new earnings or news arrive, and different investors sometimes land in very different places. For example, one Narrative on Hershey currently anchors on a fair value near US$123, while another points closer to US$211, based on differing views on cocoa costs, tariff risks, new snack categories and pricing power.

Do you think there's more to the story for Hershey? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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