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On Friday, Stifel analysts maintained their Hold rating on Hershey shares, with a price target of $160.00. According to InvestingPro data, the $33.16 billion market cap company currently trades at a P/E ratio of 15.04, suggesting it may be undervalued relative to its growth potential. The company’s first-quarter results surpassed expectations, with earnings per share (EPS) of $2.09, which was $0.14 higher than Stifel’s estimate. The better-than-expected performance was attributed to slightly improved sales and less contraction in gross margin than anticipated. Notably, Hershey maintains a strong dividend yield of 3.28% and has increased its dividend for 15 consecutive years, as highlighted in InvestingPro’s analysis.
Hershey’s management has confirmed its 2025 guidance, which does not include the impact of tariffs beyond the second quarter. However, the company anticipates an EPS decline in the mid-30s percentage range for the year, largely due to significant cocoa inflation. Despite these challenges, Hershey expects to achieve EPS growth next year, even considering the current tariff exposure.
Stifel’s updated outlook takes into account the tariff headwinds, leading to a reduction in the EPS estimates for 2025, particularly in the latter half of the year. The firm also lowered its 2026 EPS estimate but continues to project mid-single digit EPS growth from a reduced earnings base.
The reaffirmed $160 price target reflects Stifel’s ongoing caution regarding Hershey’s stock, as the company navigates through the economic pressures of cocoa inflation and tariffs. Hershey’s management remains focused on driving EPS growth in the following year despite these headwinds.
In other recent news, Hershey Co (NYSE:HSY) reported its first quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $2.09, compared to the forecasted $1.97. However, the company fell short on revenue, recording $2.81 billion against a projected $2.84 billion. Despite the earnings beat, concerns over the revenue shortfall and future margin pressures were noted. Hershey’s forward guidance indicates challenges ahead, including a significant decline in gross margin for the second quarter. In terms of market analysis, Bernstein updated its outlook on Hershey, raising the stock price target to $155 from $147 while maintaining a Market Perform rating. This adjustment reflects mixed trends within Hershey’s product lines, with some segments thriving and others facing difficulties. Hershey’s management remains optimistic about future growth, with new product innovations, particularly in the Reese’s brand, expected to bolster market presence.
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