Is Hershey Co (HSY) overvalued?
On Equity Rank's model estimate, HSY trades 19% above its fair value. Hershey Co (HSY) last closed at $178.08; the multi-method model fair value is $149.66.
| Price | Model fair value | Price vs model |
|---|---|---|
| $178.08 | $149.66 | 19% above |
What the answer rests on
- 3 of 10 valuation methods put HSY's value above its price and 7 put it below, so the methods disagree.
- To justify today's price, HSY's free cash flow would need to grow about -3.9% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -1.1% a year.
- HSY trades at 19.7 times its last year's earnings, against a median of 17.8 for 47 profitable Consumer Staples companies.
- Over the past year the price sat below the model fair value on 25% of trading days. The gap ranged from 13% below to 44% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind HSY's fair value · What prices assume · Other companies