CFRA raises Hershey stock price target to $192, maintains Hold rating

On Wednesday, CFRA analyst Arun Sundaram increased the price target for Hershey shares to $192 from $156 while maintaining a Hold rating on the stock. Currently trading at a P/E ratio of 15.71 with a market capitalization of $34.66 billion, InvestingPro analysis indicates the stock is slightly overvalued at current levels. Sundaram justified the new target price by applying a 25 times multiple to the anticipated 2026 earnings per share (EPS) of $7.68, an increase from the previous estimate of $7.09. The 2025 EPS forecast remains unchanged at $6.18. The stock has shown strong momentum, posting a 9% return in the past week and a 6.4% gain year-to-date, though InvestingPro technical indicators suggest the stock may be entering overbought territory.

The analyst’s decision to assign a premium to Hershey’s stock is based on a stronger belief that the company will achieve growth at or above its algorithmic target in 2026. This confidence stems from Hershey’s presentation at the Consumer Analyst Group of New York (CAGNY) conference last week, where the company discussed potential 2026 EPS outcomes under various cocoa cost scenarios.

According to Hershey’s analysis, if cocoa costs remain at 2025 levels, the company expects to return to its standard algorithmic EPS growth, which is in the high single digits. If cocoa costs fall to 2024 levels, Hershey forecasts an EPS exceeding $10 in 2026, and if they drop to 2023 levels, the EPS could surpass $12. The current consensus among analysts for Hershey’s 2026 EPS is $6.81, representing an approximate 11% growth rate, which is slightly higher than the company’s typical growth algorithm.

Sundaram noted that while there is still a long way to go until 2026 and circumstances could change, investor optimism is evident from the approximately 20% increase in Hershey’s stock price since February 4. Despite the positive momentum, CFRA maintains a Hold rating on Hershey shares, suggesting that the risk/reward balance has evened out with the recent rise in investor expectations. Notably, InvestingPro data reveals the company has maintained dividend payments for 55 consecutive years, with a current yield of 3.07%, highlighting its strong commitment to shareholder returns. For deeper insights into Hershey’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, The Hershey Company (NYSE:HSY) disclosed the approval of special retention awards for three top executives, as per an 8-K filing with the Securities and Exchange Commission. This move is part of Hershey’s strategy to retain key leadership, with restricted stock units awarded to senior executives contingent upon their continued employment until 2027. Citi analyst Thomas Palmer updated Hershey’s stock price target to $173 from $154, maintaining a Neutral rating, reflecting the recent decline in cocoa prices which may lower costs in 2026. Meanwhile, TD Cowen’s analyst Robert Moskow raised Hershey’s stock target to $159 from $146, keeping a Hold rating, while highlighting expected changes in gross margins and pricing strategies in response to consumer demand. In a significant financial move, Hershey issued $2 billion in new debt notes across four tranches with varying maturities, as detailed in another SEC filing. This debt issuance is part of Hershey’s ongoing financial strategy and capital management, potentially funding various corporate purposes. Analysts and investors are closely watching these developments as they reflect Hershey’s strategic responses to market conditions and its financial planning. These recent developments underscore Hershey’s proactive measures in leadership retention, financial management, and adapting to market dynamics.

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