Food Confectioners · NYSE
Current Price
$189.16
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on The Hershey Company with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
The Hershey Company, together with its subsidiaries, engages in the manufacture and sale of confectionery products and pantry items in the United States and internationally. The company operates through three segments: North America Confectionery, North America Salty Snacks, and International. It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products, including mints, chewing gums, and bubble gums; pantry items, such as baking ingredients, toppings, beverages, and sundae syrups; and snack items comprising spreads, meat snacks, bars and snack bites, mixes, popcorn, and protein bars. The company provides its products primarily under the Hershey's, Reese's, Kisses, Jolly Rancher, Almond Joy, Brookside, barkTHINS, Cadbury, Good & Plenty, Heath, Kit Kat, Payday, Rolo, Twizzlers, Whoppers, York, Ice Breakers, Breath Savers, Bubble Yum, Lily's, SkinnyPop, Pirates Booty, Paqui, Dot's Homestyle Pretzels, and ONE Bar brands, as well as under the Pelon Pelo Rico, IO-IO, and Sofit brands. It markets and sells its products to wholesale distributors, chain grocery stores, mass merchandisers, chain drug stores, vending companies, wholesale clubs, convenience stores, dollar stores, concessionaires, and department stores. The company was founded in 1894 and is headquartered in Hershey, Pennsylvania.
ROIC (TTM)
9.0%
ROE (TTM)
19.2%
FCF Yield
5.39%
Based on trailing twelve-month data, HSY shows a free cash flow per share of N/A and a ROIC of 9.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 5.39% are important context metrics when evaluating HSY's stock valuation relative to peers.
The intrinsic value of HSY depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether HSY is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $189.16. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on The Hershey Company: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Food Confectioners industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting HSY's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For The Hershey Company, this means projecting how much free cash flow the Food Confectioners will produce over the next 5-10 years, then discounting those amounts to today's dollars. HSY's ROIC of 9.0% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For HSY, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
