Hershey Faces Challenges Despite Strong Market Presence
Hershey Company (HSY), valued at $34.6 billion, is a prominent global player in the chocolate and confectionery markets, with operations extending across approximately 80 countries. The company categorizes its business into three segments: North America Confectionery, North America Salty Snacks, and International.
Over the past 52 weeks, Hershey’s shares have underperformed compared to the broader market. HSY shares have fallen by 14.6%, while the S&P 500 Index ($SPX) has increased by 8.6%. However, year-to-date, Hershey’s performance shows slight improvement, surpassing the S&P’s decline of 3.8%.
When examining the consumer market specifically, Hershey has also lagged behind the Consumer Staples Select Sector SPDR Fund (XLP), which has seen a 4.8% increase over the same period.
In its recent financial reports, Hershey posted a better-than-expected Q1 2025 adjusted EPS of $2.09. Despite this, HSY shares dipped slightly on May 1 due to a significant year-over-year EPS decline of 31.9% and a 13.8% drop in net sales to $2.8 billion, underperforming analysts’ predictions. The company also dealt with challenges such as inventory issues linked to ERP systems, holiday timing changes, and limited shipping days. Looking ahead, management forecast for full-year adjusted EPS between $6 and $6.18, signaling a mid-30% decrease from 2024, which has raised investor concerns.
For the fiscal year ending December 2025, analysts anticipate HSY’s adjusted EPS will fall by 36.4% year-over-year to $5.96. Hershey’s earnings surprise history shows variability; the company met expectations in two out of the last four quarters but fell short in two instances.
Among the 23 analysts tracking HSY, the overall consensus rating stands at “Hold,” comprising one “Strong Buy,” 17 “Holds,” one “Moderate Sell,” and four “Strong Sells.”
On May 5, Andrew Lazar, an analyst with Barclays, reaffirmed an “Equal-Weight” rating for Hershey while raising the price target to $165. Currently, HSY is trading above the average price target of $159.82, with the highest Street target of $211 suggesting a potential increase of 23.5% from its current valuation.
On the date of publication, Sohini Mondal did not hold (either directly or indirectly) any positions in the securities mentioned in this article. All data in this piece is for informational purposes only. Please refer to the Barchart Disclosure Policy here.
The opinions expressed herein are solely those of the author and do not necessarily reflect those of Nasdaq, Inc.
