Shares of global chocolate manufacturer Hershey Co. (HSY) gained nearly 1.2% to close at $178.52 on Thursday after the company reported excellent financial results for the second quarter ended July 4, driven by strong international and domestic demand.
Apart from chocolates, the Pennsylvania-based company also offers baked products like cakes and cookies. (See Hershey stock chart on TipRanks)
Adjusted earnings per share increased 12.2% year-over-year to $1.47, beating the Street’s estimate of $1.43. Quarterly net sales grew 16.5% to $1.99 billion, exceeding analysts’ expectations of $1.83 billion.
Hershey’s North America segment net sales rose 12.3% year-over-year to $1.78 billion, and net sales for Hershey’s International and other segments climbed 70.2% to $210.2 million.
Furthermore, the company has updated its outlook for 2021. It expects net sales growth to be in the range of 6% to 8%, up from the previous range of 4% to 6%. Adjusted EPS guidance range remains unchanged at $6.79 to $6.92.
On July 27, RBC Capital analyst Nik Modi reiterated a Buy rating on the stock with a price target of $188 (5.3% upside potential).
Ahead of the second-quarter results, the analyst said, “We see trends as favorable for HSY in Q2 and the remainder of the year: the c-store channel has been strong on mobility, vaccination uptake has removed much of the uncertainty around holidays, the mix is generally shifting back toward higher-priced items, and key competitors still seem to be struggling. We have an upward bias to our estimates on the print.”
Overall, the stock has a Moderate Buy consensus based on 4 Buys and 5 Holds. The average Hershey price target of $179.89 implies the stock is fully valued at current levels. Shares have gained 23% over the past six months.
According to TipRanks’ Smart Score rating system, Hershey scores a 9 out of 10, suggesting that the stock is likely to outperform market averages.
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