Hershey (HSY) Stock Forecast & Price Target

Hershey demonstrated a solid performance in the confectionery segment, with a 6% increase in overall sales and a 2% growth in volume, attributed to positive effects from additional shipping days and effective pricing strategies. The company's North America Salty Snacks division experienced an impressive 36% increase in organic sales, bolstered by several factors, including promotional shifts and sustained strength in newer products like Dot’s Pretzels and Skinny Pop. Seasonal sales in the confectionery business showed notable growth, with Halloween and Holiday sales rising 7.6% and 3.3% year-over-year, coupled with a gain of 40 basis points in seasonal share, enhancing Hershey's competitive position in the market.

Hershey's stock outlook is negatively impacted by a projected decline in fiscal year 2025 earnings per share (EPS), estimated to fall to $6.13, reflecting a nearly 35% decline year-over-year. The company issued guidance indicating at least 2% sales growth, but this is overshadowed by significant inflationary pressures, particularly in cocoa prices, as well as challenges from rebased incentive compensation and an increased tax rate, which counteract the benefits from pricing and cost efficiencies. Furthermore, category softness in the ready-to-eat popcorn segment has contributed to a high-single-digit percentage decline in market share, compounding pressures on the overall financial performance.