Hershey Co. (NYSE:HSY)

Price to earnings (P/E) ratio

The P/E ratio shows a general upward trend from 2018 to 2022, increasing from 19.52 in 2018 to 29.86 in 2022. There is a notable spike in 2019 reaching 29.21, followed by a dip to 24.51 in 2020, and then a gradual rise again in the subsequent years to peak in 2022. This pattern suggests increasing market optimism or higher valuation multiples over the period, with some volatility observed during the mid-period year of 2020.

Price to operating profit (P/OP) ratio

The P/OP ratio also follows a similar trend to the P/E ratio, rising from 14.16 in 2018 to 21.72 in 2022. It shows a peak in 2019 at 21.04, a decline in 2020 down to 17.58, and an upward movement recovering through 2021 and 2022. This trend indicates fluctuating investor sentiment towards the company’s operating profitability, with temporary contractions but overall increasing valuation relative to operating earnings.

Price to sales (P/S) ratio

The P/S ratio increases consistently over the years from 2.95 in 2018 to 4.71 in 2022, with a steady year-over-year rise except for a slight dip in 2020 where it decreased to 3.85. The continuous upward trajectory suggests growing market valuation of the company’s sales, implying improved revenue prospects or market confidence in future sales growth despite slight interruptions.

Price to book value (P/BV) ratio

The P/BV ratio shows a different pattern compared to other ratios, starting high at 16.43 in 2018 and peaking further to 19.31 in 2019. However, it experiences a significant decline to 14.03 in 2020 and remains relatively stable afterwards with minor fluctuations, ending at 14.88 in 2022. This decline suggests a reassessment of the company’s book value by the market, indicating either increased asset base or reduced market premium relative to book equity values during and after 2020.

Share Price

The share price exhibits a clear upward trend from 2018 through 2022. Starting at $110.22 in 2018, it increased steadily each year, reaching $240.69 in 2022. Notable surges occurred between 2018-2019 and 2021-2022, indicating strong market confidence and positive investor sentiment over the period.

Earnings Per Share (EPS)

EPS shows overall growth with some fluctuations. Beginning at $5.65 in 2018, it slightly declined to $5.48 in 2019 but then increased consistently through 2022, reaching $8.06. This upward trajectory, particularly from 2020 onward, suggests improved profitability and operational efficiency in recent years.

Price-to-Earnings (P/E) Ratio

The P/E ratio exhibits variation, starting at 19.52 in 2018 and rising to a peak of 29.21 in 2019. A dip occurred in 2020 to 24.51, followed by a rise again through 2022 to 29.86. This pattern reflects changing investor expectations relative to earnings, with the relatively high P/E ratios in recent years potentially indicating market optimism about future growth prospects despite higher share prices.

Share Price

The share price experienced a general upward trend over the observed five-year period. It increased significantly from $110.22 in 2018 to $240.69 in 2022, with a slight dip in 2020 to $151.29 from the previous year's peak of $160.11. The overall trajectory reflects strong market confidence and positive valuation growth.

Operating Profit per Share

Operating profit per share showed consistent growth across the years, starting at $7.79 in 2018 and rising steadily to $11.08 in 2022. The increase indicates improved operational efficiency or profitability on a per-share basis, with the most notable gains occurring after 2019.

Price-to-Operating-Profit Ratio (P/OP)

The P/OP ratio exhibited some volatility but generally trended upwards. It rose from 14.16 in 2018 to a peak of 21.04 in 2019, dropped to 17.58 in 2020, then climbed again to 21.72 by 2022. This pattern suggests fluctuating investor sentiment and possibly changing perceptions of future earnings potential relative to operating profits.

The analysis of the annual financial data reveals distinct trends in share price, sales per share, and price-to-sales (P/S) ratio over the five-year period ending December 31, 2022.

Share Price

The share price demonstrated a robust upward trend across the period. Beginning at $110.22 in 2018, it increased significantly to $160.11 in 2019. Although there was a slight decline in 2020 to $151.29, the price rebounded strongly thereafter, reaching $202.59 in 2021 and further rising to $240.69 in 2022. This pattern suggests overall investor confidence and market appreciation of the company's equity despite minor volatility in 2020.

Sales Per Share

Sales per share exhibited a steady increase throughout the period. Starting at $37.36 in 2018, sales per share gradually rose each year, reaching $38.08 in 2019, $39.34 in 2020, and accelerating to $43.71 in 2021 and $51.07 in 2022. This consistent growth indicates positive performance in revenue generation on a per-share basis, reflecting operational strength and effective revenue expansion over time.

Price-to-Sales (P/S) Ratio

The P/S ratio experienced growth with some fluctuations. It was 2.95 in 2018, rising to 4.21 in 2019, then slightly decreasing to 3.85 in 2020. The ratio increased again to 4.63 in 2021 and marginally to 4.71 in 2022. The general upward movement of the P/S ratio implies that the market valuation relative to sales has increased, suggesting heightened investor expectations or improved market sentiment, particularly after the dip in 2020.

Overall, the data illustrate a company that has achieved strong market valuation growth alongside consistent increases in sales per share. The temporary declines noted in 2020 for both share price and P/S ratio suggest a period of market adjustment or external challenges, but the subsequent recovery and growth highlight resilience and positive financial performance in the following years.

Share Price Trend

The share price exhibited a consistent upward trajectory from 2018 to 2022. Starting at $110.22 in 2018, the price increased markedly to $160.11 in 2019. Although there was a slight dip in 2020 to $151.29, the price rebounded strongly in the following years, reaching $202.59 in 2021 and peaking at $240.69 in 2022. This indicates a general positive market valuation over the five-year period.

Book Value per Share (BVPS) Development

The book value per share showed steady and significant growth during the same period. Beginning at $6.71 in 2018, there was a consistent upward movement each year, culminating in a BVPS of $16.17 by the end of 2022. This steady increase suggests improving net asset value on a per-share basis.

Price to Book Value (P/BV) Ratio Analysis

The P/BV ratio experienced some fluctuations over the five-year span. Initially, it rose from 16.43 in 2018 to a peak of 19.31 in 2019, indicating a higher market price relative to book value. However, in 2020, the ratio dropped to 14.03, reflecting either a correction in share price relative to book value or a faster growth in book value. Subsequently, the ratio stabilized around approximately 15, with values of 15.08 in 2021 and 14.88 in 2022, suggesting a market valuation closer aligned with its book value after the earlier volatility.

Overall Insights

Over the period analyzed, the company demonstrated both market confidence, as evidenced by the rising share price, and a strengthening underlying asset base, as reflected in the growing book value per share. The initial spike and later stabilization in the P/BV ratio likely represent shifts in investor sentiment and adjustments in valuation expectations. The ratio's decline after 2019, coupled with the continued increase in book value and share price, indicates that market price growth began to align more closely with fundamental value towards the end of the period.