Hershey (HSY) Stock Forecast & Price Target

Hershey's stock outlook is bolstered by a 6% increase in confectionery sales, driven by a 2% volume growth attributed to additional shipping days and a 4% rise in pricing actions taken in August. The North America Salty Snacks segment has exhibited strong performance, with organic sales surging 36%, showcasing the benefits of strategic promotions and inventory adjustments. Seasonal strengths, particularly during Halloween and Holiday periods, contributed to an overall improvement in retail sales, evidencing the company's ability to capture market share and adapt to consumer demand.

Hershey is forecasting a significant decline in earnings per share (EPS) for FY25, estimating a drop of nearly 35% to $6.13, attributed to factors such as significant cocoa inflation, increased incentive compensation, and a higher tax rate, which are expected to negate the benefits of pricing strategies and cost savings. The company also anticipates only a modest sales growth of at least 2%, while facing challenges in its salty snacks division, where inventory reductions and shipment execution issues resulted in a notable volume decline. Additionally, Hershey has experienced softness in its ready-to-eat (RTE) popcorn segment, losing market share and contributing to a broader downturn in its base business performance.