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Investing.com - DA Davidson has maintained its Neutral rating on Hershey (NYSE:HSY) with a price target of $163.00 following the company’s second-quarter results. According to InvestingPro data, the stock currently trades at a P/E ratio of 25x and a notably high Price/Book multiple of 8.2x, suggesting rich valuation levels.
Hershey exceeded quarterly expectations due to stronger-than-forecast volume, partially attributed to earlier Halloween shipments, and better-than-expected gross margin performance resulting from cocoa mitigation efforts.
Despite the positive quarterly performance, tariffs have negatively impacted Hershey’s fiscal year 2025 outlook, according to DA Davidson’s analysis.
The firm noted that Hershey has demonstrated solid U.S. market share gains across candy, gum, and mint categories, as well as with its SkinnyPop and Dot’s Homestyle Pretzels brands, indicating the company is "effectively controlling the controllables."
DA Davidson expressed caution about Hershey’s current stock valuation, suggesting it reflects optimistic expectations amid ongoing concerns about how consumers will respond to price increases exceeding 20% and various macroeconomic uncertainties.
In other recent news, Hershey Co reported its second-quarter earnings for 2025, surpassing analyst expectations with earnings per share of $1.21, compared to the forecasted $0.99. The company also exceeded revenue projections, reporting $2.61 billion against the anticipated $2.52 billion. In light of these results, Stifel raised its price target for Hershey to $185, maintaining a Hold rating, while CFRA increased its target to $212, also maintaining a Hold rating. CFRA cited Hershey’s solid momentum and potential outcomes for 2026 as factors for the significant price target increase, despite challenges from cocoa inflation and tariffs.
Additionally, Hershey and Mondelēz International announced the launch of two new collaborative products, the Reese’s Oreo Cup and the Oreo Reese’s Cookie, following consumer demand. These developments reflect Hershey’s strategic efforts to innovate and expand its product offerings in response to market trends. The company’s recent performance and strategic initiatives have garnered attention from analysts and investors alike.
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