Bernstein Reiterates Outperform Rating on Hershey (HSY)

Bernstein SocGen Group analyst Alexia Howard reiterated an Outperform rating and $84.00 price target on Hershey (NYSE: HSY).

The analyst commented: "Hershey at present: We estimate that cocoa costs were $2.5k-$3k in 2023 (and accounted for ~15% of COGS), $3k-$3.5k in 2024, and $5k-$5.5k in 2025 (when cocoa likely accounted for ~23% of COGS). Previously, Hershey had said FY26 EPS could increase back to ~$10 if cocoa costs return to 2024 levels, although this is likely overoptimistic since it doesn’t factor in operational deleveraging from volume declines due to the +DD% price hikes taken throughout 2025. While there will be an obvious tailwind from cocoa price deflation, we also expect Hershey to benefit in 1H26 from the recent double-digit price increases.

Looking forward for Hershey: Consensus estimates Hershey’s COGS will decrease from $7.6b this year to $7.3b in 2026, allowing for meaningful margin improvement and EPS growth of ~17.5%. We agree there could be meaningful upside from the combination of the recent price increase and falling cocoa input costs, and estimate that, in 2026, COGS could fall to $7.1b and EPS could increase to $7.55, or ~7% ahead of consensus estimates of $7.04. In our model, however, we are accounting for additional volume headwinds from GLP-1 drug uptake, media coverage of various MAHA regulatory initiatives, and SNAP restrictions, and therefore estimate that FY26 EPS will land quite a bit lower at around $6.61."

For an analyst ratings summary and ratings history on Hershey click here. For more ratings news on Hershey click here.

Shares of Hershey closed at $191.20 yesterday.

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