...

The Hershey Company (HSY) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

Popular:

The Hershey Company (HSY)

View Full Profile →

Intrinsic Value (DCF)

Current$195.29
→
Intrinsic$204.10
+5%
$131.90$204.10$341.27
Market implies 14% growth for 5 years
HSY appears fairly valued — current price aligns with our DCF estimate.
At $195, the market prices in 14% annual cash flow growth — a moderate expectation aligned with historical trends (15%).
Range: Bear $132 → Bull $341. Current price implies expectations near the base case.
Discount ↓Growth →11%13%15%17%
8%$251$274$300$327
10%$170$187$204$223
12%$126$138$151$165
14%$98$107$117$128

Bull Case

  • Bull case ($341) offers 75% upside at 18% growth, 9% discount
  • 4% margin of safety vs. base case estimate
  • Market-implied growth (14%) ≤ historical CAGR (15%)

Bear Case

  • Bear case ($132) implies 32% downside at 12% growth, 12% discount
Loading charts...

5-Year Free Cash Flow Projection

Year 1$2.21B
Year 2$2.54B
Year 3$2.92B
Year 4$3.36B
Year 5$3.86B
Terminal$56.77B

📐 Model Inputs

Growth Rate14.9%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$1.93BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

Related Analysis

Full Stock ProfileCompare HSY vs AAPLStock Screener

Frequently Asked Questions

Is HSY stock undervalued or overvalued?
🟡 FAIRLY VALUED

HSY trades at $195.29, within 10% of our $204.10 intrinsic value estimate. At 10.0% WACC and 14.9% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $132.01 (bear) to $306.37 (bull).

What is HSY's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.93B, projected at 14.9% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $4.72B net debt and dividing by 0.20B shares: Bear $132.01 | Base $204.10 | Bull $306.37. Current price $195.29 implies +14% to base case.

How is HSY's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 14.9% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($46.25B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 24.0x.