Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The Hershey Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.7% to 2.3% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 26, DPO 51, DIO 74). At a 6.5% WACC with mid-year discounting, the terminal value (79% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.9x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $193.54 per share, suggesting HSY is fairly valued by 8.7% at the current price of $212.00.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 2,431 | 2,488 | 2,557 | 2,677 | 2,738 | 2,807 |
| (−) Net Interest | 185 | 190 | 195 | 204 | 209 | 214 |
| (+) D&A | 584 | 619 | 652 | 639 | 665 | 682 |
| EBITDA | 3,201 | 3,297 | 3,404 | 3,520 | 3,612 | 3,702 |
| (−) Tax | 406 | 415 | 427 | 447 | 457 | — |
| (−) CapEx | 670 | 685 | 704 | 737 | 754 | — |
| (−) ΔWC | 411 | 31 | 37 | 65 | 33 | — |
| Free Cash Flow (FCF) | 1,715 | 2,166 | 2,236 | 2,271 | 2,368 | — |
| Peers' EBITDA Multiple | 12.9x | |||||
| Terminal Value | 47,612 | |||||
| WACC / Discount Rate | 6.55% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,661 | 1,969 | 1,908 | 1,819 | 1,780 | 34,668 |
| Enterprise Value | 43,804 | |||||
| Projection Period | 9,136 | 20.9% | ||||
| Terminal Value | 34,668 | 79.1% | ||||
| (−) Current Net Debt | 4,477 | |||||
| Equity Value | 39,327 | |||||
| (÷) Outstanding Shares | 203M | |||||
| Fair Price | $193 | -8.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 8.9x | 10.9x | 12.9x | 14.9x | 16.9x |
|---|---|---|---|---|---|
| 4.6% | $154 | $184 | $213 | $242 | $271 |
| 5.6% | $147 | $175 | $203 | $231 | $258 |
| 6.6% | $140 | $167 | $194 | $220 | $247 |
| 7.6% | $134 | $159 | $185 | $210 | $235 |
| 8.6% | $128 | $152 | $176 | $201 | $225 |
Current price: $212.00. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.