The stock of Hershey (HSY) is up about 3% on Dec. 15 after the chocolate maker received an upgrade from analysts at Morgan Stanley (MS).
Claim 50% Off TipRanks Premium and Invest with Confidence
- Unlock hedge-fund level data and powerful investing tools designed to help you make smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis so your portfolio is always positioned for maximum potential
The Wall Street investment bank upgraded HSY stock to a Buy-equivalent overweight rating from Hold previously amid easing cocoa cost pressures. Morgan Stanley says that Hershey is entering an earnings recovery that is not yet reflected in consensus share price forecasts.
Morgan Stanley expects HSY stock to return 20%, including dividends, as earnings rebound from a period marked by heavy cost inflation due to record cocoa prices that led to negative investor sentiment. The analysts say that Hershey now offers accelerating earnings growth heading into 2026.
Hershey’s Challenges
Hershey is emerging from one of the most challenging periods in its history, according to Morgan Stanley. Poor growing conditions and crop yields, led cocoa prices to soar in recent years to record levels. As recently as this past summer, cocoa was trading at $8,235 per tonne, its highest level in 45 years as the global supply of the active ingredient in chocolate dwindled.
However, cocoa prices are now starting to come down, taking some pressure off of Hershey whose products include Reese’s peanut butter cups, Hershey Kisses, and Milk Duds. Morgan Stanley says Hershey is well-positioned to rebound in the new year and for its earnings to accelerate. The bank sees Hershey sustaining double-digit earnings growth through its fiscal year 2027.
HSY stock has declined 23% over the past three years.
Is HSY Stock a Buy?
Hershey’s stock has a consensus Hold rating among 17 Wall Street analysts. That rating is based on two Buy, 14 Hold, and one Sell recommendations issued in the last three months. The average HSY price target of $191.73 implies 3.14% upside from current levels.
