The Hershey Company (NYSE: HSY) has seen a flurry of analyst activity regarding its price target, reflecting a mix of optimism and caution surrounding the confectionery giant’s prospects amidst rising cocoa prices and strategic initiatives.
Hershey Co Price Targets Raised
On Thursday, December 18, Hershey shares traded at $188.16, down $0.77 (-0.00%) from the previous close. This relatively flat performance comes after a period of heightened analyst activity and market adjustments. The stock performance reflects the mixed signals from analysts and the broader market.
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Piper Sandler recently raised its price target on Hershey to $193 from $180, maintaining a Neutral rating. The firm cites visibility on Hershey’s top-line momentum and potential benefits from cocoa tariff relief driving above-algorithm EPS growth. This adjustment aligns with other recent price target revisions. Morgan Stanley upgraded Hershey to Overweight on December 15, increasing the price target to $211 from $195, signaling increased confidence in the company. Stifel Nicolaus also raised its price target to $195 from $185, while maintaining a Hold rating. JP Morgan, back in October, edged its target up to $189 from $187, keeping a Neutral stance. However, not all analysts are bullish; Piper Sandler reiterated an Underweight rating with a $167 price target in October.
Hershey’s financial performance in the third quarter of 2025 exceeded expectations, with adjusted earnings per share (EPS) of $1.30, surpassing estimates of $1.06. Net sales also rose by 6.5% year-over-year to $3.18 billion.
However, S&P Global Ratings revised Hershey’s outlook from stable to negative in May, citing increased leverage due to high cocoa costs and ongoing acquisitions. The ‘A’ issuer credit rating was affirmed, but the negative outlook indicates potential risks if leverage isn’t reduced within 24 months. The company itself anticipates adjusted gross profit margins to contract significantly in 2025, by approximately 650 to 700 basis points, due to these rising costs. To mitigate these pressures, Hershey is focusing on product diversification, including salty snacks like SkinnyPop and Dot’s Pretzels. They are also implementing the “Smart Complexity” program to streamline packaging and enhance automation, aiming for cost savings.
HSY Analyst Summary
Bull Case
- Top-line momentum remains strong, exceeding internal targets.
- Cocoa tariff relief boosts earnings per share (EPS) growth.
- Diversification into salty snacks provides revenue buffer.
Bear Case
- Rising cocoa prices significantly impact profit margins.
- Increased leverage puts pressure on credit rating.
- Negative outlook from S&P raises financial concerns.
The recent analyst activity and market performance highlight the competing forces at play for Hershey. Positive revisions reflect confidence in the company’s top-line growth and strategic initiatives, while concerns about cocoa prices and leverage contribute to a more cautious outlook.
