After Another Sweet Earnings Report, Hershey's Has a High Bar to Clear HSY stock is close to its all-time high after a bullish earnings report. However, up 22% in the last 12 months, Hershey stock could have a tough time...

Hershey's (NYSE:HSY) delivered another solid quarter of earnings on July 29. That is pushing HSY stock back to its all-time high set earlier in July. At this point, it's likely that the stock will accomplish the milestone. However, it's also likely that, in terms of stock price growth, this may be as good as it gets for Hershey, at least for now.

It all has to do with expectations. The company has set a high bar for itself and it could clear it. However, the stock appears to have priced in that performance. The HSY stock price is currently about 4% above the consensus estimate of the analysts. And, Hershey's stock is bumping up against the most bullish price target of the analyst community.

What Did Earnings Say?

Hershey's delivered earnings per share (EPS) of $1.45 which beat analysts' estimates for $1.44 EPS. The company also reported $1.99 billion in revenue. Both numbers were higher than the same quarter in 2020. They were also higher than the same quarter in 2019 for those who are skeptical of a comparison to the pandemic year.

Where the bar gets more difficult to clear is with the guidance. Hershey's is guiding for full-year EPS between $6.79 and $6.92. That means it will need to deliver between $3.37 and $3.55 in EPS for the next two quarters.

In 2020, the company delivered EPS of $3.35 in the last two quarters of the year. But in 2019, the EPS only came in at $2.89.

The company has no long-term debt due until 2023 and maintained its guidance for $550 million in CAPEX spending. The balance sheet looks strong.

It really depends on which comparison you feel is more accurate to the company's current situation.

The Bulls Have a Case

The second quarter (the one just ended) is historically Hershey's weakest in terms of revenue. That makes sense. Aside from Easter, there was no event that is associated with chocolate. That changes in the back half of the year. The company reports that they've already begun their Halloween shipping and then they get the Holiday season in December.

Putting those events in with an economy that is reopening makes the company's ambitious numbers seem achievable.

The Bears Are Gaining Steam

On the other hand, the Delta variant of Covid-19 is creating an element of uncertainty to the pace of economic recovery. In some areas of the country, schools may not be reopening for in-person learning. That likely means a fewer-than-expected amount of workers will return to the office.

And that will put pressure on the "on-the-go" snacking sector that propelled the company in the prior quarter. The company did acknowledge that they expect away from home sales to moderate after they surged in the previous quarter. And that was without making any mention of the Delta variant.

Is Hershey a Good Value?

HSY stock is currently trading at around 26x earnings. That keeps it in about the middle of the pack among comparable consumer staples companies.

With that in mind, HSY stock is still worth holding on to for its dividend. The company just announced a 12% increase to its dividend. Investors will get their first taste of the new dividend in September. That makes it twelve straight years of dividend increases for the company.

Hershey's is also conducting a share repurchase program. There's no questioning the company's commitment to its shareholders.

However, there's reason to wonder if there's much growth left. Hershey's stock is up 22% in the last 12 months, outpacing the 17% return of the S&P 500. It's also about 10 percentage points higher than the average return over the last five years.

Hershey is a hold for me. What could change my mind however is if the company gets bullish upgrades from the analyst community.