Hershey: Convincing EPS Growth Plan but Unproven Margin Durability Supports Hold Rating

In a report released today, Robert Moskow from TD Cowen maintained a Hold rating on The Hershey Company, with a price target of $210.00.

Robert Moskow has given his Hold rating due to a combination of factors related to Hershey’s growth outlook and execution risk. He acknowledges management’s convincing plan for strong EPS growth driven by cocoa cost relief, innovation, and upgraded capabilities, and he notes that recent sales trends and retail data support the case for a rebound in volumes despite pressures on lower-income consumers.

At the same time, he is cautious about how ambitious the long-term margin targets are, especially given Hershey’s history of margin pressure when profitability reaches peak levels and the many external risks to demand. While the enhanced supply chain, automation, and data-driven tools should underpin competitiveness and productivity, the need to first prove that volume growth and margin expansion are both durable leads him to a more balanced, wait-and-see Hold stance rather than a more aggressive rating.

In another report released yesterday, RBC Capital also maintained a Hold rating on the stock with a $212.00 price target.

Based on the recent corporate insider activity of 123 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of HSY in relation to earlier this year.