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Investing.com - Mizuho (NYSE:MFG) has reiterated its Neutral rating and $155.00 price target on Hershey (NYSE:HSY), a company currently trading near its InvestingPro Fair Value, following the announcement of Kirk Tanner as the company’s new CEO. The company maintains strong fundamentals with a "Good" Financial Health score and has raised dividends for 15 consecutive years.
The research firm noted that Tanner’s background in Consumer Packaged Goods snacking, beverages, and innovation provides "an encouraging foundation for new perspectives" and aligns with their expectation that Hershey would likely select an outside candidate for the position.
Mizuho expects Hershey’s strategic focus to remain on consumer segmentation and customer partnerships, while suggesting that larger brand-building investments could emerge early in Tanner’s tenure.
The firm acknowledged positive developments including Hershey’s return to candy/mint/gum share growth and moderating chocolate volume declines exiting the second quarter.
Despite these improvements, Mizuho cited persistent cocoa inflation and uncertainties related to tariffs and health and wellness trends as "limiting factors for visibility into sales and EPS," supporting their continued Neutral stance on the stock.
In other recent news, The Hershey Company announced that Kirk Tanner will become the new President and CEO, effective August 18, 2025. This leadership change comes amid challenges such as rising cocoa costs and tariffs, which have led Moody’s to change Hershey’s outlook from stable to negative. Despite these issues, Hershey maintains its A1 senior unsecured rating, thanks to its strong market position and pricing power. In financial developments, Piper Sandler has reiterated an Underweight rating on Hershey due to the expected significant impact of tariffs starting in the third quarter of 2025. The firm has lowered its earnings per share estimate for 2025 and 2026, citing ongoing tariff and cocoa price pressures.
Meanwhile, Hershey’s revenue growth remains promising, with U.S. retail sales up 18.9% year-to-date, partly due to Easter timing. The company is actively working to mitigate cocoa price pressures through pricing strategies and operational efficiencies. Additionally, Hershey is planning to use $750 million of its cash reserves to fund the acquisition of LesserEvil, expected to close in 2025. The company has also decided not to repurchase shares this year, focusing instead on improving its credit metrics.
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