The Hershey Company (HSY) AI Stock Analysis

• Market Cap: $47.77B
• Dividend Yield: 3%
• Average Volume (3M): 2.14M
• Price to Earnings (P/E): 54.4
• Beta (1Y): -0.06
• Revenue Growth: 4.71%
• EPS Growth: -23.03%
• Country: US
• Employees: 18,540
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Food Confectioners
• EPS (TTM): 1.71
• Shares Outstanding: 148,077,440
• 10 Day Avg. Volume: 1,841,475
• 30 Day Avg. Volume: 2,143,805
• PEG Ratio: -0.70
• Price to Book (P/B): 7.99
• Price to Sales (P/S): 3.17
• P/FCF Ratio: 21.17
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 4.45
• Enterprise Value/Gross Profit: 13.38
• Enterprise Value/Ebitda: 29.63
• 1Y Price Target: $229.88
• Price Target Upside: -2.47% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 18
• EPS Forecast (FY): 8.38
• Revenue Forecast (FY): $12.24B

• Rating: 68 Neutral
• Price Target: $243.00 ▲(3.10% Upside)
• Action: Downgraded Date: 02/18/26
• Date: Action: Downgraded 02/18/26

HSY scores positively on strong technical momentum and resilient cash generation, but the overall rating is held back by a sharp 2025 margin/earnings reset and a high P/E (~51) that increases downside if recovery is slower than guidance. The earnings call supports the outlook with clear recovery targets for 2026, though cocoa and pricing elasticity remain key risks.

Positive Factors

Cash Generation

Consistent, sizable OCF and FCF (~$2.28B in 2025) provides durable internal funding for brand investment, dividends, M&A integration and eventual buybacks or debt paydown. Strong cash conversion cushions the business against earnings volatility and supports multi-year strategic plans.

Snacks Growth Momentum

Double-digit volume and ~18% Q4 growth in salty snacks reflect structural portfolio diversification beyond confectionery. This durable segment momentum can sustain mid-single-digit organic growth, improve overall category mix, and provide a higher-frequency, more resilient revenue stream over coming quarters.

Brand & Innovation Strength

Elevated ad spend and repeat innovation indicate management is strengthening household penetration and pricing power. Durable brand equity across marquee SKUs supports long-term volume retention, premiumization opportunities and faster recovery from category shocks versus lesser-known peers.

Negative Factors

Material Margin Reset

A multi-hundred basis point margin decline is a structural earnings headwind: it reduces operating leverage and return on capital, requires sustained pricing or cost recovery to restore profitability, and increases sensitivity of free cash flow to commodity or volume swings over the medium term.

Elevated Leverage

A sizeable absolute debt load limits strategic flexibility: it constrains faster capital return, raises vulnerability to profit shocks, and can force trade-offs between deleveraging and funding brand investment or M&A. Elevated leverage magnifies downside if margins or volumes underperform guidance.

Commodity & Hedging Risk

Persistent cocoa cost pressure and hedge positioning reduce margin upside from falling commodity prices and keep input-cost risk elevated. Ongoing cocoa volatility can force further pricing, compress margins, or erode volumes if elasticity is underestimated, challenging margin recovery plans over multiple quarters.

The Hershey Company Business Overview & Revenue Model

Company Description

The Hershey Company, together with its subsidiaries, engages in the manufacture and sale of confectionery products and pantry items in the United States and internationally. The company operates through three segments: North America Confectionery, North America Salty Snacks, and International. It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products, including mints, chewing gums, and bubble gums; pantry items, such as baking ingredients, toppings, beverages, and sundae syrups; and snack items comprising spreads, meat snacks, bars and snack bites, mixes, popcorn, and protein bars. The company provides its products primarily under the Hershey's, Reese's, Kisses, Jolly Rancher, Almond Joy, Brookside, barkTHINS, Cadbury, Good & Plenty, Heath, Kit Kat, Payday, Rolo, Twizzlers, Whoppers, York, Ice Breakers, Breath Savers, Bubble Yum, Lily's, SkinnyPop, Pirates Booty, Paqui, Dot's Homestyle Pretzels, and ONE Bar brands, as well as under the Pelon Pelo Rico, IO-IO, and Sofit brands. It markets and sells its products to wholesale distributors, chain grocery stores, mass merchandisers, chain drug stores, vending companies, wholesale clubs, convenience stores, dollar stores, concessionaires, and department stores. The company was founded in 1894 and is headquartered in Hershey, Pennsylvania.

How the Company Makes Money

The Hershey Company generates revenue primarily through the sale of its confectionery products, which are distributed through various channels, including grocery stores, convenience stores, and vending machines. Key revenue streams include sales from chocolate bars, candies, and related snacks. Hershey's strategic partnerships with retailers and distributors enhance its market reach and ensure consistent product availability. Additionally, the company invests in marketing and advertising to strengthen brand loyalty, driving consumer demand for its products. Seasonal product offerings, such as Halloween and Christmas-themed candies, also contribute significantly to sales during peak times.

The Hershey Company Financial Statement Overview

Summary

Cash generation is a key strength (2025 operating cash flow and free cash flow both about $2.28B, up vs. 2024 FCF), and the balance sheet has de-risked versus earlier years despite still-elevated leverage. However, 2025 profitability reset materially (gross margin ~33% vs. ~47% in 2024; net margin ~8% vs. ~20%), making earnings durability the primary financial risk.

Income Statement

Revenue has been resilient with modest growth in recent years, including low-single-digit growth in 2025 vs. 2024. However, profitability weakened sharply in 2025: gross margin fell to ~33% (from ~47% in 2024) and net margin dropped to ~8% (from ~20% in 2024), driving a steep decline in net income. Overall, the business shows solid scale and a history of strong margins, but the latest year reflects a meaningful margin and earnings reset that tempers the outlook.

Balance Sheet

Leverage is elevated but relatively stable, with debt-to-equity around ~1.16 in 2025 (improved from ~2.16 in 2020). Equity has grown over time, supporting a stronger capital base. Returns on equity remain healthy (~19% in 2025), though down sharply from prior years due to the earnings decline. Key watch item is the still-high absolute debt load (~$5.4B) relative to equity, which reduces flexibility if profits remain pressured.

Cash Flow

Cash generation remains a clear strength: 2025 operating cash flow was ~${2.28}B and free cash flow also ~${2.28}B, up meaningfully versus 2024 free cash flow (~$1.93B). Cash flow has generally held up better than reported earnings in the latest year, suggesting good cash conversion and working-capital discipline. The main limitation is that some cash-flow coverage metrics are unavailable/zero in 2025 data, so debt-service capacity can’t be fully assessed from the provided figures.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	11.69B	11.20B	11.16B	10.42B	8.97B
Gross Profit	3.89B	5.30B	5.00B	4.50B	4.05B
EBITDA	1.45B	3.10B	2.75B	2.44B	2.24B
Net Income	883.26M	2.22B	1.86B	1.64B	1.48B
Balance Sheet
Total Assets	13.74B	12.95B	11.90B	10.95B	10.41B
Cash, Cash Equivalents and Short-Term Investments	925.86M	730.75M	401.90M	463.89M	329.27M
Total Debt	5.40B	5.45B	5.13B	5.12B	5.38B
Total Liabilities	9.10B	8.23B	7.80B	7.65B	7.66B
Stockholders Equity	4.64B	4.71B	4.10B	3.30B	2.76B
Cash Flow
Free Cash Flow	1.75B	1.93B	1.55B	1.81B	1.59B
Operating Cash Flow	2.28B	2.53B	2.32B	2.33B	2.08B
Investing Cash Flow	-1.28B	-960.31M	-1.20B	-787.38M	-2.22B
Financing Cash Flow	-803.36M	-1.30B	-1.15B	-1.42B	-681.14M

The Hershey Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 235.69
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HSY, the sentiment is Positive. The current price of 235.69 is above the 20-day moving average (MA) of 222.93, above the 50-day MA of 201.77, and above the 200-day MA of 181.89, indicating a bullish trend. The MACD of 9.34 indicates Negative momentum. The RSI at 73.80 is Negative, neither overbought nor oversold. The STOCH value of 91.92 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HSY.

The Hershey Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TR	76 Outperform	$2.89B	30.77	11.04%	0.95%	0.34%	0.85%
HSY	68 Neutral	$47.77B	54.40	18.89%	3.00%	4.71%	-23.03%
GIS	68 Neutral	$24.08B	9.77	27.29%	5.19%	-5.65%	0.41%
MDLZ	63 Neutral	$77.47B	32.61	9.29%	3.53%	4.13%	-5.19%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
SJM	61 Neutral	$12.23B	―	-20.68%	4.45%	-0.66%	-326.55%
KHC	54 Neutral	$29.01B	-4.96	-12.87%	6.75%	-3.70%	-431.05%

The Hershey Company Corporate Events

Hershey Updates By-laws to Enhance Governance

On December 5, 2025, The Hershey Company amended its By-laws to enhance corporate governance. The amendments, effective immediately, remove the provision allowing Michele Buck to hold the Chairman position, eliminate references to the Lead Independent Director, and clarify the roles of the Governance Committee Chair and Vice Chairman during emergencies or the CEO’s unavailability.

The most recent analyst rating on (HSY) stock is a Hold with a $195.00 price target. To see the full list of analyst forecasts on The Hershey Company stock, see the HSY Stock Forecast page.