HSY – Market expectations are for Uniform ROA to expand, but management maybe concerned about pricing, growth, and Krave

• The Hershey Company (HSY:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 23.8x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about their pricing strategy, growth, and Krave
  
  

• Specifically, management may lack confidence in their ability to sustain net price realization improvements, mitigate FX headwinds, and continue to gain candy, mint, and gum category share. In addition, they may lack confidence in their ability to sustain solid snack portfolio growth and Take5’s repeat purchase strength. Furthermore, they may have concerns about their operating leverage and the impact of COVID-19, and they may be downplaying concerns about the drag of Krave on total consumption and enterprise resource planning constraints. Finally, they may be overstating the importance of their Krave acquisition and the potential of their new trade model in Mexico