Valued at a market cap of $31.4 billion, The Hershey Company (HSY) manufactures and sells confectionery products and pantry items. The Hershey, Pennsylvania-based company operates through three segments: North America Confectionery, North America Salty Snacks, and International.
This confectionery manufacturer’s shares have significantly lagged behind the broader market over the past 52 weeks. HSY has declined 20.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 20.6%. Moreover, the stock is down 8.5% on a YTD basis, compared to SPX’s 2.5% rise during the same time frame.
Zooming in further, HSY’s underperformance becomes more evident when compared to the Consumer Staples Select Sector SPDR Fund’s (XLP) 7.5% return over the past 52 weeks and nearly 1% gain on a YTD basis.
The Hershey Company’s underwhelming performance over the past year has been driven by rising cocoa prices, which have put margin pressures on the company, and a shift in consumer preferences toward healthier foods and value-seeking meals, leading to slowing consumer demand.
Nonetheless, on Feb. 6, shares of HSY surged 4.4% as the company delivered better-than-expected Q4 results. Its adjusted earnings of $2.69 per share advanced 33.2% from the year-ago quarter and surpassed Wall Street’s expectations of $2.37 by a notable margin of 13.5%. Moreover, revenue rose 8.7% year-over-year to $2.9 billion, surpassing consensus expectations by 1.7%. A robust 35.9% sales growth in its North America Salty Snacks segment and a notable 360 bps adjusted operating margin expansion primarily contributed to its top and bottom-line beat. Additionally, innovative marketing strategies and effective in-store execution further supported its strong results.
For the current fiscal year, ending in December 2025, analysts expect HSY’s EPS to decline 32.4% year over year to $6.33. The company’s earnings surprise history is mixed. It topped the Wall Street estimates in two of the last four quarters while missing on two other occasions.
Among the 22 analysts covering the stock, the consensus rating is a “Hold,” which is based on one “Strong Buy,” 16 “Hold,” one “Moderate Sell,” and four “Strong Sell” ratings.
On Feb. 3, Bernstein SocGen Group maintained a “Market Perform” rating on HSY but lowered its price target to $146. As of writing, the stock is trading 6.1% above this price target.
The mean price target of $160.57 represents a slight 3.6% upside from HSY’s current price levels, while the Street-high price target of $222 suggests an upside potential of 43.3%.
