Hershey's Sweet Spot: Analysts Boost Targets Ahead of Key Earnings Report
Investors with a sweet tooth are closely watching The Hershey Company (NYSE: HSY) as the iconic confectioner gears up to release its fiscal fourth-quarter and full-year 2025 earnings on February 5th. The period leading up to the report has been marked by a notable shift in analyst sentiment, with several firms raising their price targets on the stock.
On February 2nd, DA Davidson increased its price target to $207 from $185, pointing to favorable tailwinds including cocoa deflation, potential tariff resolutions, and encouraging data on consumer price sensitivity. The firm suggested these factors could lead to upward revisions for fiscal year 2027 as Hershey's earnings power recovers, though it maintained a Neutral rating, cautioning that much of this optimism may already be reflected in the stock's current valuation.
This move followed similar adjustments from other Wall Street houses. Deutsche Bank lifted its target to $188 from $180 on January 29th, while Morgan Stanley raised its target to $214 from $211 on January 28th, maintaining an Overweight rating. Morgan Stanley analysts told clients that declining cocoa prices—a key input cost—combined with solid retail scanner data improve the visibility for Hershey's earnings per share outlook in 2026 and 2027, which they believe will exceed consensus estimates.
Hershey, which operates through its North America Confectionery, North America Salty Snacks, and International segments, is a dominant player with a portfolio of beloved brands like Hershey's, Reese's, and Kisses. The recent analyst activity underscores a broader narrative of relief in the confectionery sector after a period of severe cost inflation, particularly for cocoa.
Market Pulse: Voices from the Trading Floor
"Finally, some relief on the cost side," said Michael Rivera, a portfolio manager at Clearwater Capital. "Hershey's brand loyalty is proven. If they can navigate this cost transition and maintain pricing, the margin story for the next two years looks compelling. I'm cautiously optimistic ahead of the call."
"This feels like classic 'sell the news' setup," argued Sarah Chen, an independent trader known for her bearish takes. "The stock has run up on hope. Every analyst and their dog has now hiked targets. Where's the new catalyst? The multiples are stretched, and one quarter of slightly better cocoa prices doesn't fix a year of pain. I'd be taking profits, not adding before earnings."
"The analyst moves are logical, but the real test is consumer behavior," noted David Fischer, a consumer staples analyst at Midwestern Trust. "Early elasticity reads are promising, but we need confirmation that volume is holding as they adjust prices. The upcoming guidance will be far more important than the quarterly beat or miss."
The consensus view suggests a turning point may be near for Hershey, but the upcoming earnings report and, more critically, its forward guidance will determine whether the stock can sustain its recent momentum or if the positive developments are already priced in.