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Investing.com - Piper Sandler has raised its price target on Hershey (NYSE:HSY) to $145.00 from $120.00 while maintaining an Underweight rating on the stock ahead of the company’s second-quarter earnings report. The stock, currently trading at $183.54, has shown strong momentum with a 10.6% gain over the past week. According to InvestingPro data, seven analysts have recently revised their earnings estimates upward for the upcoming period.
The chocolate maker is scheduled to release its second-quarter 2025 earnings results on July 30, though Piper Sandler notes investor focus will likely center on the company’s 2026 outlook and its "building blocks" for that year. With a solid financial health score of "GOOD" from InvestingPro and a steady dividend yield of 3.02%, Hershey maintains strong fundamentals despite near-term challenges.
The firm updated its model to reflect more realistic cocoa costs, as previous projections had anticipated a sharp drop in cocoa futures that has not materialized and may not occur soon, resulting in approximately a $0.90 reduction to 2026 earnings per share estimates.
Piper Sandler also factored in about $0.30 of partially offsetting incremental savings and now assumes further pricing actions in 2026, which adds approximately $1.65 to its earnings per share projection.
The research firm maintained its 2025 earnings per share estimate of $5.45 while raising its 2026 forecast from $5.22 to $6.28, with tariffs remaining a significant variable estimated to create a $1.60 annualized headwind.
In other recent news, Hershey has announced a price increase on its candies due to rising cocoa costs. This decision was made to address the unprecedented cost of cocoa, a key ingredient in its products. Additionally, Hershey revealed a significant leadership change with Kirk Tanner, currently the CEO of Wendy’s (NASDAQ:WEN), set to become its new CEO starting August 18, 2025. Tanner will succeed Michele Buck, who had previously announced her retirement. In response to this announcement, Wells Fargo (NYSE:WFC) reiterated its Underweight rating on Hershey with a price target of $135.00. Mizuho (NYSE:MFG) maintained a Neutral rating with a $155.00 price target, noting Tanner’s background could bring new perspectives to the company. Bernstein also reiterated its Market Perform rating, aligning with a price target of $155.00. These developments underscore a period of transition for Hershey as it navigates changes in leadership and cost pressures.
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