The Hershey Company (HSY) DCF Valuation
TGM's two-stage DCF values The Hershey Company (HSY) between $153.60 and $321.03 depending on assumptions, with a base case of $218.03. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$175.31 is justified only if free cash flow grows about +4.7% a year (fading to 2.5% long-run) at a 7.5% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 6.3%/yr | 8.5% | $153.60 |
| Base case | 9.3%/yr | 7.5% | $218.03 |
| Optimistic | 12.3%/yr | 6.5% | $321.03 |
| Analyst DCF (FMP) | independent reference — different model | $438.91 | |
Current Price
$175.31
Market-Implied Growth
+4.7%/yr
vs +10.9% 5Y actual
Model Scenario Range
$153.60 – $321.03
model output — not a price target
HSY DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for HSY (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $1.8B · 0.20B shares · net debt $4.5B
Estimated Fair Value
$286.35
+63.3% vs $175.31
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 9.3%/yr FCF growth and 10-year horizon fixed. Green = above today's $175.31; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $402 | $449 | $512 | $600 | $731 |
| 6.5% | $310 | $337 | $371 | $414 | $472 |
| 7.5% | $249 | $266 | $286 | $311 | $342 |
| 8.5% | $206 | $217 | $230 | $246 | $265 |
| 9.5% | $174 | $182 | $191 | $201 | $213 |
About The Hershey Company
The Hershey Company, operating with its various subsidiaries, serves as a key manufacturer and distributor of both sweet confections and general household pantry items. Its market reach extends across the United States and globally. The enterprise strategically divides its operations into three main business segments: North America Confectionery, North America Salty Snacks, and an International division. Its extensive product catalog features a wide array of offerings. This includes various chocolate and non-chocolate candies, as well as refreshing chewing gums and mints. Beyond traditional treats, Hershey also supplies pantry essentials such as baking ingredients, dessert toppings, a range of beverages, and sundae syrups. Furthermore, their snack collection encompasses diverse items like spreads, meat snacks, various bars and snack bites, popcorn, and protein bars. The company markets its broad product line under numerous iconic brand names. Its extensive brand portfolio includes household names such as Hershey's, Reese's, Kisses, Jolly Rancher, Kit Kat, Twizzlers, York, and Ice Breakers, alongside other popular confectionery brands like Almond Joy, Cadbury, Heath, Payday, Rolo, and Whoppers. The snack segment features well-known names like SkinnyPop, Pirates Booty, Paqui, Dot's Homestyle Pretzels, and ONE Bar, complemented by international offerings such as Pelon Pelo Rico, IO-IO, and Sofit. Hershey distributes its merchandise through a comprehensive network of channels. These include wholesale distributors, major grocery store chains, large-scale retailers, pharmacies, vending machine operators, warehouse clubs, convenience stores, discount stores, concession stands, and department stores. Established in 1894, The Hershey Company maintains its corporate headquarters in Hershey, Pennsylvania.
- Sector
- Consumer Defensive
- Industry
- Food Confectioners
- CEO
- Kirk C. Tanner