Hershey: Strong Earnings Momentum and Margin Recovery Potential Offset by Cocoa Volatility and Cost Risks, Justifying a Hold Rating

Analyst Peter Galbo of Bank of America Securities reiterated a Hold rating on The Hershey Company, boosting the price target to $240.00.

Peter Galbo has given his Hold rating due to a combination of factors that balance strong recent performance with meaningful medium‑term uncertainties. He highlights that Hershey’s latest quarterly earnings were significantly better than his prior expectations and that management’s new 2026 profit outlook is well ahead of his earlier forecasts, signaling solid momentum in volume, tariff benefits, and a faster‑than‑anticipated margin recovery extending into 2027. He also views the company’s multi‑year path toward higher earnings per share as progressing in a constructive way, supported by limited private‑label competition in North American chocolate and an innovation pipeline that should sustain brand strength.

At the same time, Galbo notes that several risks justify maintaining a Neutral stance rather than moving to a more bullish rating. Near term, margins are expected to be under pressure in the first quarter as Hershey works through elevated input and tariff costs, with the recovery more back‑half weighted. Longer term, the trajectory of earnings growth is exposed to volatile cocoa prices, the impact of further pricing actions on consumer demand, and the pace at which margins can continue to recover. While he raises his earnings estimates and increases his price objective to $240 based on these improvements, the mix of upside drivers and external cost and elasticity risks leads him to conclude that the stock is appropriately valued at current levels, warranting a Hold recommendation.

In another report released today, TD Cowen also maintained a Hold rating on the stock with a $210.00 price target.

HSY’s price has also changed moderately for the past six months – from $188.940 to $224.380, which is a 18.76% increase.