Key Stats for Hershey Stock
- Current Price: $206.19
- Target Price (Mid): $312.44
- Street Target: $229.09
- Potential Total Return: +51.5%
- Annualized IRR: 9.10% / year
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What Happened?
Hershey (HSY) stock has been pulled in two directions this week. The Reese’s recipe controversy went viral after Brad Reese, grandson of brand inventor H.B. Reese, publicly accused the company of replacing classic milk chocolate and peanut butter with cheaper compound coatings in select products.
Hershey confirmed the changes affected less than 3% of Reese’s items and announced it will transition those products back to traditional recipes by 2027.
The core Reese’s Peanut Butter Cups and standard Hershey’s bars were never affected.
The bigger catalyst was the March 31 Investor Day at the NYSE, where management reaffirmed full-year 2026 guidance and laid out a multi-year growth roadmap.
HSY fell 2.65% on Investor Day before recovering to $206.19 by April 2, up roughly 15% year to date but still about 14% below its 52-week high of $239.48.
Bulls argue Hershey is exiting its worst commodity cycle in a generation with stronger brands, a restructured commercial model, and a recovering margin profile that the market has not fully priced in.
Bears point to a forward P/E of 24.57x that looks full for a company guiding to 2% to 4% organic revenue growth, with GLP-1 drug adoption and consumer spending pressure as structural overhangs.
The key question: Is the guided 30% to 35% adjusted EPS recovery in 2026 already reflected in the current price?
CEO Kirk Tanner, speaking at the NYSE, told analysts, “We are emerging stronger than ever after unprecedented cocoa inflation pressure. We invested during this time. We reinvigorated our core brands with core innovation, invested in technology infrastructure, and transformed our cost structure.”
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Is Hershey Undervalued Today?
At 24.57x NTM earnings, Hershey does not look cheap in isolation. But that multiple sits on trough earnings. In 2025, normalized EPS came in at $6.31, down 32.7% as cocoa costs peaked.
CFO Steve Voskuil told analysts at the Investor Day: “We see [the margin recovery] not as the end goal, but as the new platform for modest expansion thereafter.”
Management has guided through 2028, with 2% to 4% organic revenue growth and 6% to 8% EPS growth as the long-term algorithm. The 2025 gross margin of 37.2% is expected to recover toward approximately 41% in 2026 and expand further toward 44% by 2030, supported by easing cocoa costs and a productivity program Voskuil confirmed will generate roughly 3% savings annually, up from the 1% baseline the company ran at five years ago.
Nestlé trades at 14.14x NTM EV/EBITDA (enterprise value divided by earnings before interest, taxes, depreciation, and amortization) and General Mills at 10.07x, against Hershey’s 15.54x. That premium reflects category leadership in U.S. confectionery, though it also means any execution miss gets punished quickly.
The One Hershey model, which consolidates sweet and salty commercial teams into one integrated go-to-market structure, is the medium-term growth mechanism.
U.S. President Andrew Archambault noted at the Investor Day that Hershey’s top 100 confection SKUs (stock keeping units, meaning individual product varieties) sit in only about 60% of U.S. retail locations measured by ACV (all commodity volume, a weighted measure of store coverage), against a target of 90%.
That gap is years of volume-driven growth with minimal incremental investment.
The company has 1,100 sales reps covering 75,000 outlets, heading to 80,000, with 75% of the portfolio priced at $4 or below.
The primary risk is execution pace. GLP-1 drugs (glucagon-like peptide-1 agonists, appetite-suppressing weight-loss medications) are accelerating in adoption. Voskuil noted internal teams “do nothing but obsess” on GLP-1 and consumer spending scenarios when stress-testing the 2026 and 2027 outlook.
Pricing elasticity is a second risk: Hershey took significant price increases over the past two years, and whether volume recovers as those increases cycle out is the top-line swing factor.
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TIKR Advanced Model Analysis
- Current Price: $206.19
- Target Price (Mid): $312.44
- Potential Total Return: +51.5%
- Annualized IRR: 9.10% / year
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The TIKR mid-case model values HSY at $312.44 by December 31, 2030, representing 51.5% total upside from $206.19, or 9.10% annualized. The mid-case assumes Hershey executes its stated algorithm and nothing more.
The two revenue drivers are North America Confectionery recovery and Salty Snacks distribution expansion through the One Hershey model, together producing a 2.4% revenue CAGR from 2025 through 2030. The margin driver is gross margin normalization supported by lower cocoa costs and productivity gains. Supply Chain Officer Jason Reiman stated at the Investor Day that decision intelligence investments alone are expected to increase productivity by $50 million and reduce inventory by $100 million over the next two years.
The TIKR high case implies $437.07 at 9.0% IRR if Salty Snacks gains a meaningful share and international margins recover ahead of schedule. The low case of $305.67 still implies 48.2% total return through 2030 if growth comes in at the low end of guidance. The primary downside risk is a renewed cocoa spike before the productivity program fully offsets commodity volatility.
Conclusion: Watch gross margin at Q1 2026 earnings on April 30, 2026. Management guided for approximately 400 basis points of gross margin recovery in 2026 versus the 37.2% reported in 2025. A Q1 print at or above 40% confirms the recovery is on track. A miss pushes the EPS timeline out and reopens the bear case.
Hershey is a 132-year-old category leader exiting a generational commodity shock. The TIKR mid-case implies 9.10% annualized returns through 2030, well above what the Street’s $229.09 consensus target suggests.
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Should You Invest in Hershey?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
