Morgan Stanley sets Hershey stock at Equalweight, $183 target

On Monday, Morgan Stanley (NYSE:MS) initiated coverage on Hershey shares, assigning an Equalweight rating with a price target of $183. The new coverage comes as the firm observes a shift in investor sentiment following the removal of the company’s 2025 guidance overhang, which seemed to have marked a low point. According to InvestingPro data, the stock is currently trading near its Fair Value, with a market capitalization of $33.8 billion and a P/E ratio of 15.18x.

The research firm noted an improved outlook for Hershey’s top-line growth, as market share trends show signs of stabilization. Additionally, the potential for declining cocoa prices is highlighted as a factor that could significantly boost earnings in the medium term. Despite these positive indicators, Morgan Stanley expressed caution due to the volatility of cocoa prices and the challenges that may arise from attempting further price increases. InvestingPro analysis reveals that Hershey has maintained dividend payments for 55 consecutive years, though 13 analysts have recently revised their earnings estimates downward for the upcoming period.

Morgan Stanley’s commentary suggests that while there are opportunities for Hershey, there are also considerable uncertainties that warrant a neutral stance at this time. The firm’s price target of $183 reflects a balanced view of these potential risks and rewards. Recent financial data from InvestingPro shows modest revenue growth of 0.33% and a "Good" overall financial health score, with 8 additional ProTips available to subscribers looking for deeper insights into Hershey’s financial position.

The coverage initiation by Morgan Stanley is likely to be closely watched by investors, as the firm’s analysis provides a comprehensive look at both the positive prospects and the hurdles Hershey might face. With the current market dynamics and Hershey’s financial outlook, Morgan Stanley’s Equalweight rating indicates a wait-and-see approach to the stock.

Investors will continue to monitor Hershey’s performance, especially in relation to cocoa price fluctuations and the company’s ability to navigate market challenges while seeking growth opportunities. The market’s response to Morgan Stanley’s coverage may influence Hershey’s stock movement in the near term.

In other recent news, The Hershey Company (NYSE:HSY) has announced the appointment of Stacy Taffet as Chief Growth Officer, effective April 14, 2025. Taffet brings extensive marketing and leadership experience from her previous role at PepsiCo (NASDAQ:PEP), where she served as Senior Vice President of Beverage Portfolio Strategy and Marketing. In a separate development, Hershey has amended its bylaws to adopt a majority voting standard for board elections, enhancing its corporate governance practices. This change includes a director resignation policy, ensuring that any director who receives more votes against than for their election must offer to resign.

Additionally, Hershey has raised concerns about the ICE New York cocoa futures market, citing issues with liquidity and volatility. Tricia Brannigan, Hershey’s Vice President for Procurement, has highlighted the impact of high margin calls on commercial participants, leading to price fluctuations. Meanwhile, CFRA analyst Arun Sundaram has increased Hershey’s stock price target to $192, maintaining a Hold rating. Sundaram’s analysis considers potential 2026 earnings per share scenarios based on varying cocoa costs.

Lastly, the cocoa market is experiencing a notable shift, with Ghana reporting a 70% surge in cocoa arrivals due to an improved harvest and reduced smuggling. This development is significant given the previous global cocoa shortage and its impact on prices.

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