In a market that has seen its fair share of volatility, Hershey Co 's stock has not been immune to the pressures facing the consumer goods sector. Recently, the company's shares dipped to a 52-week low, trading at $171.55. This downturn reflects a broader trend for the chocolate and confectionery giant, which has experienced a 1-year change showing a decline of nearly 12%. Investors and market analysts are closely monitoring Hershey's performance as it navigates through the challenges of fluctuating commodity prices, supply chain constraints, and changing consumer preferences that have impacted the industry at large.
In other recent news, The Hershey Company (NYSE:HSY) has acquired the sour candy brand Sour Strips, a strategic move to diversify its sweets portfolio. The company's founder, Maxx Chewning, will continue to lead the brand's marketing and innovation. This acquisition comes alongside Hershey's projection of maintaining steady top-line growth of 2% to 4% for 2025, despite anticipating significant inflation impacts due to rising cocoa and sugar costs. The company also faces increased pricing pressure in international markets, particularly Mexico and Brazil, and is adapting its portfolio in response to consumer behavior changes. Hershey projects cost savings of around $180 million for 2025 from productivity and AAA programs.
Piper Sandler, an independent financial services firm, has adjusted its price target on Hershey shares to $168 from $165, maintaining a neutral rating. This adjustment reflects revised expectations for Hershey's performance through 2025 and 2026, considering potential headwinds like a higher anticipated tax rate and an increase in incentive compensation. The firm has lowered its earnings per share estimates for Hershey from $8.65 to $8.15 for the year 2025 and from $9.45 to $9.35 for 2026. These are recent developments that provide investors insights into Hershey's strategies and performance expectations in the face of market challenges.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Hershey Co's current financial position and market performance. Despite the stock trading near its 52-week low, Hershey maintains a solid dividend track record, having raised its dividend for 15 consecutive years and maintained payments for an impressive 54 years. This consistency in shareholder returns is particularly noteworthy given the company's current dividend yield of 3.06%.
InvestingPro Tips highlight that Hershey operates with a moderate level of debt and that its cash flows can sufficiently cover interest payments, suggesting financial stability even in challenging times. However, investors should note that 10 analysts have revised their earnings downwards for the upcoming period, which may reflect concerns about the company's near-term performance.
For those seeking a deeper understanding of Hershey's financial health and market position, InvestingPro offers 7 additional tips that could provide valuable insights for investment decisions. These additional tips, along with real-time metrics and analysis, are available to InvestingPro subscribers, offering a more comprehensive view of Hershey's investment potential in the current market climate.
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