Hershey (HSY) Stock Forecast & Price Target

Hershey's demonstrated a solid performance in its confectionery segment, achieving a 6% increase in overall sales with a 2% rise in volume, aided by enhanced shipping days and effective pricing strategies, which rose by 4%. Notably, the North America Salty Snacks division experienced substantial organic sales growth of 36%, benefiting from strategic promotional shifts and a successful product portfolio expansion featuring brands like Skinny Pop and Dot's Pretzels. Seasonal sales also showed strength, with US retail sales for Halloween and Holiday periods growing by 2.5% and 1.1%, respectively, contributing to an overall positive trend in share growth and further solidifying Hershey's market position.

Hershey's financial outlook for FY25 indicates a significant projected decline in earnings per share (EPS), estimated at $6.13, which marks a nearly 35% drop from prior levels. This decline is attributed to various factors, including substantial cocoa inflation, adjustments in incentive compensation, and an increased tax rate, which are expected to negate the benefits from pricing strategies and cost-saving measures. Additionally, the performance of salty snacks has fallen short of expectations due to adverse volume dynamics and inventory reductions, further contributing to a negative sentiment surrounding the company's sales growth and overall financial stability.