The Hershey Company (HSY – Research Report), the Consumer Defensive sector company, was revisited by a Wall Street analyst yesterday. Analyst Matthew Smith, CFA from Stifel Nicolaus maintained a Hold rating on the stock and has a $160.00 price target.
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Matthew Smith, CFA’s rating is based on several pivotal factors impacting The Hershey Company’s financial outlook. Despite reporting robust fourth-quarter results with solid sales performance across its divisions, the company’s guidance for fiscal year 2025 suggests a challenging period ahead. Hershey anticipates a modest sales growth of at least 2% but expects a significant decline in earnings per share (EPS) by 34% to 36%, primarily due to increased cocoa costs, adjusted incentive compensation, and a higher tax rate.
While there is improved visibility into cocoa costs for 2025, which helps mitigate some risk, the continued pressure from cocoa inflation is a key concern. The company’s strategic plan for 2026, however, suggests potential EPS growth even if cocoa prices remain high, contingent on the dynamics of the cocoa market. Matthew Smith, CFA, maintains a Hold rating, reflecting the balance between near-term earnings pressure from cocoa inflation and Hershey’s strong market position and pricing strategy. The target price was adjusted to $160, using a 15.5x EV/EBITDA multiple, consistent with historical trading averages, to capture these dynamics accurately.
In another report released yesterday, Citi also upgraded the stock to a Hold with a $154.00 price target.
HSY’s price has also changed moderately for the past six months – from $199.390 to $152.340, which is a -23.60% drop .