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Stock Jupiter Recommendation : Long Term Buy. Current Price $41.45 Target Price $56 (1-2 Yr Time frame)
Recent News on HSY
BusinessWire: Harris Poll Finds That Americans Love Hershey's Kisses Brand Chocolates
DOW JONES NEWSWIRES: Moody's Raises Hershey Outlook, Sees More Predictable Growth
Marketwatch: S&P revises Hershey's rating outlook to stable
HSY has been building a base since 2008, with price fluctuating between $32 and $41 range. During this period, MACD has not moved much above the zero level, further confirming the tight price range move and formation of a base.
HSY hit $41.45 on 03/05/2010, which is a major resistance point. The stock has tried to breakout of this price several time since Sept 2009, but eventually failed. From a pure technical analysis perspective, move above $41.45 point with increased volume, will list this stock to $50 and thereafter, to $57.
Quick Technical Summary-
First Resistance: $41.45
Second Resistance: $50
Third Resistance: $57
First Support: $33.70
Second Support: $30.25
Third Support: $28.50
Up / Down Volume Ratio: Positive (1.76)
50 Day MA: Positive ($37.36)
200 Day MA: Negative ($42.67)
Buy Point: Between $41.50 and $42.70
Sell Stop: $33.65
a) HERSHEY CO has shown some consistent impressive performance in EPS growth, Revenue growth, Cash Flow from operations, and Profit Margin. During the past fiscal year, HERSHEY CO increased its bottom line by earning $1.90 versus $1.36 in the prior year. This year, the market expects an improvement in earnings ($2.32 versus $1.90).
b) HERSHEY CO Profit margin of 43.80% is very strong and greater than 78% of the players in the industry.
c) HERSHEY CO Beta is 0.26. It is highly recommended low volatile stock.
d) Comparable Industry stock's Avg PEG is 3.61, based on this value HSY's future price is approx. $71.00
a) Food products Industry is currently stressed with increasing raw material prices. The key input to this industry, Milk, Eggs, Corn, Wheat, and oil etc. saw a significant increase last year, squeezing profit margins.
b) Obesity levels in US will continue to drive down demand of chocolates and fried food. At the same time, we have seen diversification into organic food by almost all players in this industry.
c) P/E of HSY is 21.79X, which is above the industry average of 19.08.