Hershey (HSY) Stock Forecast & Price Target

Hershey's demonstrated a solid performance in the confectionery sector, achieving a 6% growth with volume increasing by 2%, benefiting from additional shipping days and a 4% rise in pricing, indicating strong brand pricing power. The company's efforts to capitalize on seasonal demand resulted in US retail sales for Halloween and Holiday seasons rising by 2.5% and 1.1%, respectively, contributing to a gain in market share. Furthermore, the North America Salty Snacks division experienced a remarkable 36% increase in organic sales, underscoring the success of its recent acquisitions and promotional strategies.

Hershey's financial outlook is negatively impacted by an anticipated decline in FY25 earnings per share (EPS) of approximately 34% to 36%, attributed to significant cocoa inflation, increased incentive compensation, and a higher tax rate that overshadow anticipated benefits from pricing and cost-cutting measures. Additionally, the company has faced challenges in its salty snacks segment, which performed below expectations, leading to a projected decline in organic sales of 14%, further exacerbated by difficult sales comparisons and inventory reductions. The overall base business has also suffered a high-single-digit percentage decline, particularly within the ready-to-eat popcorn category, resulting in a loss of market share.