Download PDF

1. Company Snapshot

1.a. Company Description

The Hershey Company, together with its subsidiaries, engages in the manufacture and sale of confectionery products and pantry items in the United States and internationally.The company operates through three segments: North America Confectionery, North America Salty Snacks, and International.It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products, including mints, chewing gums, and bubble gums; pantry items, such as baking ingredients, toppings, beverages, and sundae syrups; and snack items comprising spreads, meat snacks, bars and snack bites, mixes, popcorn, and protein bars.


The company provides its products primarily under the Hershey's, Reese's, Kisses, Jolly Rancher, Almond Joy, Brookside, barkTHINS, Cadbury, Good & Plenty, Heath, Kit Kat, Payday, Rolo, Twizzlers, Whoppers, York, Ice Breakers, Breath Savers, Bubble Yum, Lily's, SkinnyPop, Pirates Booty, Paqui, Dot's Homestyle Pretzels, and ONE Bar brands, as well as under the Pelon Pelo Rico, IO-IO, and Sofit brands.It markets and sells its products to wholesale distributors, chain grocery stores, mass merchandisers, chain drug stores, vending companies, wholesale clubs, convenience stores, dollar stores, concessionaires, and department stores.The company was founded in 1894 and is headquartered in Hershey, Pennsylvania.

Show Full description

1.b. Last Insights on HSY

The recent performance of The Hershey Company was driven by solid demand, pricing, and brand strength, as evident from its Q4 earnings preview. Institutional accumulation, with several funds increasing their stakes in the company, also contributed to its positive performance. The company's 96-year dividend payment streak, with 46 increases in the last 48 years, and its expansion into healthier snacks via acquisitions and ingredient changes, further boosted its appeal. Additionally, the recent purchase of new stakes by Dynasty Wealth Management LLC and other large investors indicates growing confidence in the company's prospects.

1.c. Company Highlights

2. Hershey's Q3 2025 Earnings: A Closer Look

Hershey's reported a strong Q3 2025, with actual EPS coming in at $1.3, beating analyst estimates of $1.07. Revenue growth was also notable, although the exact figure wasn't specified. The company's margin performance was in line with expectations, with management indicating a focus on rebuilding margin to its full potential. The results demonstrate Hershey's ability to drive growth through innovation and effective pricing strategies.

Publication Date: Nov -04

📋 Highlights
  • 2026 Growth Targets:: Targeting 2%–4% revenue growth to rebuild margins to full potential, aligned with category historical performance.
  • Elasticity Assumption:: Planning for -1% elasticity in 2026, deemed a reasonable center cut amid close consumer demand monitoring.
  • Halloween Performance:: Halloween sales were "somewhat soft," but core brands and innovation investments aim to boost future seasonal performance.
  • Cocoa Cost Outlook:: Cocoa costs expected to turn deflationary in 2026 despite full-year inflation, aided by favorable hedging timing in Q3.

Revenue Growth Prospects

For 2026, Hershey's is targeting 2% to 4% revenue growth, which is sensible given the category's historical performance. Analysts estimate revenue growth at 3.8% for next year, indicating a relatively stable outlook for the company. With a P/S Ratio of 2.86, investors are pricing in moderate growth expectations, which Hershey's is on track to meet or exceed.

Elasticity and Pricing Dynamics

Hershey's is watching elasticity closely, with a planned assumption of -1% for next year. Management has indicated that there are no major concerns regarding price gaps across the portfolio, and the company is working closely with retailers to ensure the category remains healthy. With about 75% of units priced below $4, Hershey's is well-positioned to maintain consumer affordability.

Cocoa Costs and Hedging

Cocoa costs are expected to remain inflationary for the full year but may turn deflationary in 2026. Hershey's is hedged to normal levels, allowing for downside participation if cocoa prices continue to fall. This hedging strategy should help mitigate potential input cost volatility.

Valuation and Return Metrics

With a P/E Ratio of 24.29 and an ROE of 29.44%, Hershey's is trading at a premium relative to its earnings. However, the company's ROIC of 14.91% indicates a strong ability to generate returns on invested capital. The Dividend Yield of 3.38% provides a relatively attractive income stream for investors.

Outlook and Challenges

Hershey's is navigating a challenging consumer market, with weakening U.S. consumer sentiment. However, the company's category remains resilient, and management is focused on delivering growth through innovation, value in multiple transactions, and new tools like loyalty and personalization. With a robust pipeline of innovation and a strong hedging strategy, Hershey's is well-positioned to navigate potential headwinds and drive long-term growth.

3. NewsRoom

Card image cap

Consumer Staples Earnings to Watch This Week: EL, NWL, HSY, COTY, PM

Feb -03

Source: zacks.com

Card image cap

The Hershey Company Rolls Out an Egg-cellent Easter Collection Fans Will Love

Feb -03

Source: prnewswire.com

Card image cap

4 Consumer Staple Picks With the Right Setup to Top Earnings Estimates

Feb -02

Source: zacks.com

Card image cap

Hershey (HSY) Q4 Earnings Preview: What You Should Know Beyond the Headline Estimates

Feb -02

Source: zacks.com

Card image cap

Hershey Announces 2026 Investor Day

Feb -02

Source: prnewswire.com

Card image cap

Hershey (HSY) Rises As Market Takes a Dip: Key Facts

Jan -31

Source: zacks.com

Card image cap

Hershey's Q4 Earnings on Deck: What to Expect From HSY Stock?

Jan -30

Source: zacks.com

Card image cap

New Strong Buy Stocks for January 30th

Jan -30

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.70%)

6. Segments

North America Confectionery

Expected Growth: 2.5%

The 2.5% growth in North America Confectionery from The Hershey Company is driven by increased consumer demand for premium and sustainable products, expanded distribution channels, and successful innovation in product lines such as Reese's and Hershey's Kisses, offset by pricing pressures and commodity cost inflation.

International

Expected Growth: 4.0%

The Hershey Company's international segment growth of 4.0% is driven by increased consumer demand for premium and chocolate products, expansion into emerging markets, and strategic acquisitions. Pricing actions and favorable foreign exchange rates also contributed to growth. Additionally, the company's digital transformation and marketing efforts have enhanced brand visibility and consumer engagement in international markets.

North America Salty Snacks

Expected Growth: 3.2%

The 3.2% growth of North America Salty Snacks from Hershey Company is driven by consumer preference for convenience, increased snacking occasions, and expanding product portfolio. Additionally, Hershey's strategic investments in marketing and innovation have contributed to the segment's growth, particularly in the premium and better-for-you snack categories.

7. Detailed Products

Hershey's Chocolate Bars

A variety of chocolate bars made with milk chocolate, dark chocolate, and other flavors

Reese's Peanut Butter Cups

A chocolate cup filled with peanut butter, a classic American candy

Hershey's Kisses

Small, bite-sized pieces of milk chocolate with a signature drop shape

Milka Chocolate Bars

A European-style chocolate bar with a creamy milk chocolate and colorful packaging

The Hershey's Company Ice Cream

A range of ice cream products, including cones, bars, and tubs, featuring Hershey's iconic chocolate and other flavors

Hershey's Syrup

A chocolate syrup for topping ice cream, pancakes, waffles, and other desserts

Hershey's Cookies 'n' Creme Bar

A white chocolate bar with chunks of crunchy cookies

Almond Joy and York Peppermint Patie

A coconut and chocolate candy bar and a peppermint-flavored chocolate bar

8. The Hershey Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The Hershey Company operates in the confectionery industry, where there are various substitutes available, such as healthier snack options, candies from other companies, and different types of treats. However, Hershey's has a strong brand presence and a wide range of products, which reduces the threat of substitutes.

Bargaining Power Of Customers

The Hershey Company has a large customer base, including major retailers and consumers. While customers have some bargaining power, Hershey's is a well-established brand with a loyal customer base, which reduces the bargaining power of customers.

Bargaining Power Of Suppliers

The Hershey Company has a large network of suppliers, including cocoa farmers, sugar suppliers, and packaging providers. While suppliers have some bargaining power, Hershey's is a major player in the industry and can negotiate favorable prices and terms with its suppliers.

Threat Of New Entrants

The confectionery industry has high barriers to entry, including significant marketing and advertising expenses, high production costs, and strict regulations. This reduces the threat of new entrants in the market.

Intensity Of Rivalry

The confectionery industry is highly competitive, with major players such as Mars, Inc., Mondelez International, and Nestle. Hershey's competes with these companies on price, product offerings, and marketing, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 53.61%
Debt Cost 4.28%
Equity Weight 46.39%
Equity Cost 6.07%
WACC 5.11%
Leverage 115.55%

11. Quality Control: The Hershey Company passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Kraft Heinz

A-Score: 6.1/10

Value: 8.9

Growth: 3.8

Quality: 4.3

Yield: 9.0

Momentum: 1.5

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
Hershey

A-Score: 6.1/10

Value: 2.8

Growth: 6.3

Quality: 6.4

Yield: 5.0

Momentum: 7.5

Volatility: 8.3

1-Year Total Return ->

View Full Report
Stock-Card
Mondelez

A-Score: 5.6/10

Value: 3.3

Growth: 5.3

Quality: 5.0

Yield: 7.0

Momentum: 3.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
Procter & Gamble

A-Score: 5.4/10

Value: 3.0

Growth: 4.4

Quality: 7.5

Yield: 5.0

Momentum: 2.5

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Walmart

A-Score: 5.4/10

Value: 2.5

Growth: 5.4

Quality: 5.3

Yield: 2.0

Momentum: 7.5

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
Costco Wholesale

A-Score: 5.2/10

Value: 2.0

Growth: 6.8

Quality: 5.7

Yield: 2.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

205.79$

Current Price

205.79$

Potential

-0.00%

Expected Cash-Flows