Hershey Stock Analysis - Too Much Love For Chocolate...
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- เผยแพร่เมื่อ 5 ก.พ. 2025
- Hershey HSY stock analysis for 2025 - HSY stock is down 50% from its peak 2 years ago which might have been a bit too much exuberance related to future growth. Things look better now, normalized but still not cheap.
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Cocoa is ~15% of COGS and coca prices have 5x'd since 2023. That has impact on margins, therefore profit, therefore the stock price.
thanks for sharing
Good observation
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Hi Sven in my opinion it’s just the Commodity Price for Cocoa beans at the moment lowering the margins plus pressure from the weight loss drugs. Like with all commodities also this cycle will turn. Stocks like Hershey or Barry Callebaut will follow this cycle then. For a buy and hold investment it’s worth to start accumulating now ….
Completely agree. The stock analysis is not full without discussing cocoa prices
I've practically looked at the whole sector, consumer preferences are shifting-that is key. Maybe it will shift back, but...
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Depends on your finances . 1000$ in XAI910K is 4000 XAI910K if it goes to 50% of ath in 2024 thats a 600% gain. If it goes equal to ath . Its a 1200% gain.
I bought today in Hershey. 149 pr share.
Net margins and Roe is very good with this company and the chocolate issue they have will be resolved at one point or another.
Also a company with a constant growth of 6-7% in eps doesnt grow linearly but exponentially, so this flat line sven draws at the end only aplies if growth slows a lot
Sven, I agree that the stock is likely to move down over the next years. Main problem is the continuous high prices of cocoa due to lower production. This has to deal with weather and disease issues decreasing the available pool of cocoa trees. New plants take 3-5 years until beans can be collected, thus the long road ahead until cocoa prices come down again. The waiting game will be quite long for Hershey…
Cacao is up X5 maybe this lead to drop of Hershey?
I also see an opportunity in modelez , not the best stock but not that bad of value for a normalize pe of 15.6
Can you analyze General Motors next please?
not really my kind of business :-(
You've completely ignored the recent surge in the price of cocoa. ⬆⬆⬆
Agreed, probably the biggest factor determining the last 2 years performance..very in depth analysis 😅
these are sugar companies, not cocoa focused on margins...
Most of their products require cocoa…
@@Value-Investing One glance at the Wiki page for Hershey describes the company as "one of the largest chocolate manufacturers in the world". They derive about 90% of their revenue from chocolate and sugar confectionary.
Hershey, alongside Nestlé and Cadbury, is one of Barry Callebaut's biggest clients, the latter being the largest cocoa processor in the world. For instance, in 2010, Barry Callebaut was reportedly supplying 80’000 tons of cocoa to Hershey per year.
Cocoa prices are up over 140% YoY. All of the above listed companies are impacted to some degree. To not include cocoa prices as even a passing comment is just sloppy research. Sorry, Sven.
One glance at the Wiki page for Hershey describes the company as "one of the largest chocolate manufacturers in the world". They derive about 90% of their revenue from chocolate and sugar confectionary.
Hershey, alongside Nestlé and Cadbury, is one of Barry Callebaut's biggest clients, the latter being the largest cocoa processor in the world. For instance, in 2010, Barry Callebaut was reportedly supplying 80’000 tons of cocoa to Hershey.
Cocoa prices are up over 140% YoY. All of the above listed companies are impacted to some degree. To not include cocoa prices as even a passing comment is just sloppy research. Sorry, Sven.
I also hope that you have better things to do with your time than to keep deleting inconvenient comments like mine.
Sold 150 Put for $6.80 Today. There is a long term trend bottom that is currently crossing 150. Place bets on table and let's deal the cards!
Hello Sven
The company's p/e is just over 17.
Sven, the lowest PE that Hershey has traded at since 2012 was 16.4 in 2018. Hershey stock commands a premium. Its average PE over the last 12 years has been 22-23. You can’t just throw out a 15 there and say it might drop to 15. Why? Why would the premium go away? All market participants will become value investors with spreadsheets all of a sudden? 😂 The premium will be there because this is a solid American business, run for the long term by the Hershey trust and owning iconic brands. Once the cocoa prices normalise the share price will be back up.
the coca rates stole its premium :D
good point, but I am here to compare things, if I can find better for less, I do that!
Hi Sven,
I noticed that all these stocks that you talk about has too much debt to equity including cash. For example HSY has more than 100%. Is that healthy? Especially in this environment.
Depends on the business, the buybacks etc
What will be the valuation if cocoa prices continue to remain at these levels?
Sven, I'd love to hear your opinion on AES stock. P/E is down around 7, and with utility growth expected from AI buildout, I think it could be a great risk-reward. Thanks for the content!
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Sven can you pls make a video on brown and Forman
Was the delta of the delta some of what happened to Alibaba after 2021? They used to grow very much and all of a sudden they went to 0% and negative growth where a lot of us got caught - both problems with EPS and multiple contraction :/
It depends whether you believe the recent Cocoa price increase is one time, then come back, or it will remain high for quite a while. I guess Warren will step in soon. Much bigger than See’s candy.
The sell sugar, cocoa is minor
Glad to see XAI910K leading the charge. One thing to note about XAI910K tokenomics that was glossed over is that usage of the XAI910K Network burns, lowering supply and well... You know the rest ;)
Pre-market 140$ bay?
Excelente analisis , muchas gracias
I need a higher yield before hitting buy. Sven, do you have relatives in Sweden? Sven is a very Swedish name 😅
I think he said before that his mom just liked the name =)
@pongop ah, I see 😁
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Hi Sven. Hershey. It is so simple to combine what you know with a low complexity technical analysis to buy and sell at technical levels and not wait so long. In this particular case I would wait for the congestion zone on the left which is at 103 USD and coincides with 61.8% retracement. The first block of buy orders is at 127, so it makes no sense to buy before the big guys. The rebound upwards could reach 204 USD. There is no more to it, if it breaks everything is lost and if it falls below 61% it is 88 at 31 USD where I would buy without thinking about it. It couldn't be simpler.
You see it at 31 dollars?
HSY is a great stock.
thanks for sharing!
Make a video about Archer
Thanks Sven. I think if you tried their chocolate you may feel a little sick :)
Thanks for sharing
Here Sven lost the plot that current difficulties are mainly due to high cocoa prices. Wich is temporary in a few years that shouldo nornalize.
I just looked at VISA and Voo for past 5 years... why is VISA so good? I do not get it
3:23 Wouldn't it be more helpful to compare the sales to the same quarter of the previous year, rather than the previous quarter? It's my understanding chocolate consumption is quite seasonal.
Anyhow, the Q4 2024 report will be released in a week. That will make things more current.
This is not a criticism of this video. I really appreciate Sven's work and I'm learning so much from this channel.
It does compare
@@Value-Investing Then I must have misunderstood. Thank you. I was thinking it was comparing to the previous quarter, not the same quarter of the year before.
Hershey derives something like 90% of their revenues from chocolate products. Cacao crop issues are likely to persist.
I completely saw this XAI910K pump coming, never a doubt!
Mondelez does not make it on my watchlist. Hershey is a better business, but there are also better ones out there
Love it
I had a look at BATS. Up 30% over 12 months and RSI now at 79 (....). IMB similar. These are not exactly hi-tech growth stocks - what's going on?
Rotation to more stable value stocks. Plus pays dividend.
Pro business President Donald Trump cancelled the proposal to ban menthol cigarettes in US. Also its new smokeless business up 18% in the first half of last year . Its Vuse vaporizer brand is the global market leader and tobacco stick holds no 2 position worldwide. Its Velo nicotine pouches also grew fast in US last year. So revenue for its new product grew 7.4% faster than 2.6% decline in traditional cigarettes. Operating margins are also climbing. It is still undervalued. Its PE around 7. Look at MO at 9 and PM at 21
@kurniawanms2 very good, thankz.
You forgot to put it into the quadrant :)
will not follow, too expensive
How is it possible that Liberty Global trades nothing but down with 10-20% of shares repurchased every year? Are there no actual investors holding the stock or what?
I think it is only you and Seth Klarman that hold this stock 😂
@ That would explain it lol. Management also holds some. If you have a 4.5b market cap and do 1b in repurchases each year, at some point we should run out of liquidity.
Apart from the quant numbers analysis:
The new weight loss drugs from Lilly and Novo N. make fatty food companies face a strong headwind.
And the new Trump health czar, Kennedy, will also make life difficult for this company.
200k on XAI910K, Holding forever
Austrian chocolate at Aldis is so much a better deal. Hersheys, not the best.
I agree. price just returned to normal. no discount yet even after about 50% down from the peak.
Long HSY
Hershey likely has a lot more to drop. Its woe is related to global shortages of Cocoa beans. The problem is likely related to climate change and will likely be worsened in the next few years.
Most chocolates are only 30% cocoa. Rest is sugar stuff.
They are also petitioning to be allowed to load up now, so in months to come when everyone else is raising their prices they will to, but have a better margin
Cocoa price is influenced by hedge funds … it’s not only about bad harvests …
Mr Beast is eating alot of their market share. I am short
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Declining earnings, I think a PE of 10 would be a good place to start buying.
Unlikely to happen. The stock hasn’t been below a PE of 16 since 2012, probably longer but I can’t see the data. Hershey commands a premium because it’s such a strong business. This isn’t a cigar butt.
Hershey is the most foul tasting, low quality "chocolate" so i would not buy their stock for that reason alone.
Just swapped all of my last ETH and swapped it into XAI910K$. Already up a little bit. Unfortunately I have some other junk staked which won’t free up for a while. Still now I am on the train!
W00ke company with massive increased raw material costs that they are finding very hard to shift to their customers. Add in new administration that is going to go after junk food. Hershey is still way overvalued.
All these food stocks (PEP, HSY, MDLZ) are overpriced. They should all be trading at around PE15.
bad product never leads to good results....and the chocolate they make is terrible.
XAI910K is looking juicy. 🥭
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It looks XAI910K is in right position.
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Love it