Hershey Valuation.xlsx

	A	B	C	D	E	F	G	H	I	J	K
1				=	Update with your own assumptions
2	See reference numbers tab for context
3					Terminal Value Model — Valuation #1
4					0	1	2	3	4	5
5	Avg Gross Margin (2026-29)	41%	(Modest decline due to higher input costs)		2024	2025	2026	2027	2028	2029
6	Avg Revenue Growth Rate (2026-2029)	2.0%	(Using consensus revenue estimate for 2025)	Revenues	$ 11,202.00	$ 11,430.00	$ 11,658.60	$ 11,891.77	$ 12,129.61	$ 12,372.20
7	Conversion Rate of Gross Profits to Operating Profits by 2029	56.00%	Moves toward this target over time, reflecting improving operating margins thanks to efficiency	Gross Margin %	44.50%	37.50%	41%	41%	41%	41%
8	Conversion Rate of Operating Profits to Net Income by 2029	78%	(What percent of operating profit converts to net income)	Gross Profit	$ 4,984.89	$ 4,286.25	$ 4,721.73	$ 4,816.17	$ 4,912.49	$ 5,010.74
9	Shares Outstanding	202	(million)	Gross Profit / Operating Profit	0.51	0.52	0.53	0.54	0.55	0.56	(Tied to input in B7)
10				Operating Margin %	27.00%	19.50%	21.47%	21.89%	22.32%	22.68%
11	Discount Rate	8%		Operating Profit	$ 3,024.54	$ 2,228.85	$ 2,503.44	$ 2,603.58	$ 2,707.73	$ 2,806.01
12	Fair Value (Average of Two Valuation Methods)	$ 132.00		Net Income Margin	19.83%	14.50%	16.16%	16.69%	17.22%	17.69%
13	Margin of Safety	20%		Net income / Operating Profit	0.73	0.74	0.75	0.76	0.77	0.78	See cell B8
14				Net Income	$ 2,221.20	$ 1,657.18	$ 1,884.46	$ 1,984.19	$ 2,089.18	$ 2,188.69
15	Current Stock Price	$170.66		Discounted Value		$ 1,564.24	$ 1,615.62	$ 1,575.11	$ 1,535.61	$ 1,489.59	(Assumes 2% terminal growth and 8% discount rate)
16	Implied CAGR to Fair Value From Current Price	2.99%		Terminal Value						$ 25,322.97
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18	Intrinsic Value Target (With Margin of Safety)	$105.60		Present Share Value	$ 132.74
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21					Range of Exit Multiples Approach — Valuation #2
22				Weighted Value Price Target	2029 Exit P/E	Weighting	Present Intrinsic Value
23				$ 131.26	10.00	0.05	$ 73.74
24					12.00	0.05	$ 88.49
25					14.00	0.10	$ 103.24
26					16.00	0.25	$ 117.99
27					18.00	0.20	$ 132.74
28					20.00	0.15	$ 147.48
29					22.00	0.10	$ 162.23
30					24.00	0.05	$ 176.98
31					26.00	0.05	$ 191.73
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