Morgan Stanley Raises Hershey Price Target to $195 Amid Strong Earnings

Hershey (NYSE: HSY) has seen its stock price target increased from $184.00 to $195.00 by Morgan Stanley, reflecting confidence in the company following its recent quarterly earnings announcement. The financial services firm currently maintains an equal weight rating on Hershey’s stock, as detailed in a report released on October 30, 2023.

This adjustment is part of a broader trend among analysts assessing Hershey’s market position. In a separate report, TD Cowen lowered its target price from $204.00 to $200.00 while issuing a “hold” rating. On the other hand, BNP Paribas Exane upgraded Hershey from “neutral” to “outperform,” highlighting its potential for growth. Meanwhile, JPMorgan Chase & Co. raised its target from $187.00 to $189.00, maintaining a “neutral” rating, and Wells Fargo & Company increased its target from $154.00 to $157.00, labeling it as “underweight.” Lastly, Stifel Nicolaus reduced its target from $195.00 to $185.00 while also assigning a “hold” rating.

Overall, three analysts have rated Hershey’s stock as a Buy, eighteen have given it a Hold rating, and one has suggested a Sell rating. According to MarketBeat data, the stock has an average rating of “Hold” and an average target price of $182.79.

Hershey Reports Strong Quarterly Earnings

Hershey’s latest earnings report, issued on October 30, 2023, revealed a robust performance with earnings per share (EPS) of $1.30, surpassing analyst expectations of $1.06 by $0.24. The company posted a net margin of 11.84% and a return on equity of 32.08%. Revenue for the quarter reached $3.18 billion, exceeding the consensus estimate of $3.11 billion, marking a 6.5% increase compared to the same period last year.

Looking forward, Hershey has set its guidance for fiscal year 2025 at an EPS range of $5.90 to $6.00, while analysts project an EPS of $6.12 for the current year.

In addition to its financial performance, Hershey recently declared a quarterly dividend of $1.37 per share, scheduled for payment on December 15, 2023. Shareholders of record as of November 17, 2023 will be eligible for this dividend, which translates to an annualized payment of $5.48 and a yield of 3.0%. The company’s current dividend payout ratio stands at 81.91%.

Management Transactions and Institutional Activity

Recent insider activities noted a significant purchase by Kirk Tanner, the CEO of Hershey, who acquired 2,000 shares at an average price of $185.46 per share, totaling approximately $370,920. This transaction increased his ownership stake to 47,860 shares, valued at around $8.88 million. This increase reflects a 4.36% rise in his shareholding.

Conversely, Steven E. Voskuil, the Chief Financial Officer, sold 1,500 shares at an average price of $179.56, generating around $269,340. Following this sale, he holds 55,319 shares, valued at approximately $9.93 million, marking a 2.64% decrease in his ownership.

In the past three months, institutional investors have made notable adjustments to their holdings in Hershey. Choreo LLC increased its position by 3.6%, while Fulton Bank N.A. lifted its holdings by 4.9%. Other institutional investors, including Bellevue Asset Management LLC and First Horizon Advisors Inc., have also expanded their stakes, underscoring strong institutional support for the company. Currently, institutional investors own approximately 57.96% of Hershey’s stock.

As Hershey continues to navigate a competitive market, the recent price target adjustments and positive earnings report indicate a resilient financial outlook, bolstered by strategic management decisions and investor confidence.