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The Hershey Co (NYSE:HSY)
Intrinsic Value: Projected FCF
\$34.07 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, The Hershey Co's projected FCF intrinsic value is \$34.07. The stock price of The Hershey Co is \$96.86. Therefore, The Hershey Co's Price to Intrinsic Value: Projected FCF Ratio of today is 2.8.

HSY' s Price to Intrinsic Value: Projected FCF Range Over the Past 10 Years
Min: 1.42   Max: 3.44
Current: 2.84

1.42
3.44

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of The Hershey Co was 3.44. The lowest was 1.42. And the median was 2.31.

HSY's Price to Intrinsic Value: Projected FCF is ranked lower than
73% of the 1052 Companies
in the Global Confectioners industry.

( Industry Median: 1.58 vs. HSY: 2.84 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding

Here The Hershey Co's FCF(6 year avg) is calculate as

The Hershey Co Quarterly Data

 201406 201409 201412 201503 201506 201509 201512 201603 201606 201609 total_freecashflow -101 132 318 196 137 23 500 216 27 11 201112 201203 201206 201209 201212 201303 201306 201309 201312 201403 total_freecashflow 249 184 -18 226 425 290 -99 205 445 124 201012 201103 201106 201109 total_freecashflow 435 78 29 -115

Add all the Free Cash Flow together and divide 6 will get The Hershey Co's FCF(6 year avg) = \$653.11.

The Hershey Co's Intrinsic Value: Projected FCF for today is calculated as

 Intrinsic Value = (Growth Multiple * Free Cash Flow(6 year avg) + Total Equity(Sep16) * 0.8) / Shares Outstanding = (10.125989036 * 653.105666667 + 895.445 * 0.8) / 215.161 = 34.07

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

The Hershey Co's Price to Intrinsic Value: Projected FCF Ratio for today is calculated as

 Price to Intrinsic Value: Projected FCF = Share Price / Intrinsic Value: Projected FCF = 96.86 / 34.0661031507 = 2.84

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

The Hershey Co Annual Data

 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Projected FCF 22.74 26.01 20.87 24.86 25.81 27.77 35.74 41.83 43.78 35.36

The Hershey Co Quarterly Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Projected FCF 37.80 42.62 43.78 42.57 35.41 34.17 35.36 36.06 32.99 34.07
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