The Hershey Company (HSY – Research Report), the Consumer Defensive sector company, was revisited by a Wall Street analyst yesterday. Analyst Peter Galbo from Bank of America Securities maintained a Hold rating on the stock and has a $165.00 price target.
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Peter Galbo has given his Hold rating due to a combination of factors. Despite The Hershey Company reporting a stronger-than-expected adjusted EPS for the fourth quarter of 2024, surpassing both Bank of America’s estimate and the Visible Alpha consensus, the company’s outlook for 2025 shows a significant decline in adjusted EPS, with expectations of a mid-30% decrease. This projected contraction is primarily attributed to increased cocoa costs impacting gross margins, expected to shrink by 650-700 basis points year-over-year.
Additionally, while Hershey anticipates at least a 2% growth in net sales, this forecast is weighed down by weaker international performance and anticipated mid-teens decline in organic sales for the first quarter of 2025 due to inventory build laps and seasonal shipment shifts. Although there are positive takeaways, such as better-than-expected volumes and productivity, these are offset by challenges including higher costs of goods sold and increased advertising expenses. These mixed signals led to maintaining a Neutral rating with a price objective of $165, reflecting cautious optimism about the stock’s near-term performance.
In another report released yesterday, CFRA also maintained a Hold rating on the stock with a $156.00 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 .