Analyst action
TD Cowen has adjusted its price target on Hershey Co. to $210.00, up from $195.00, while maintaining a Hold recommendation on the stock. The market price noted in the report is $224.38, which the firm observed sits about 0.99% below the stock's 52-week high of $225.55. InvestingPro data referenced in the coverage indicates Hershey appears overvalued relative to its Fair Value.
Rationale for the target increase
In its update, TD Cowen pointed to expectations for a material recovery in Hershey's gross margins starting in 2026. The firm attributed the anticipated improvement to favorable elasticity trends and relief from tariffs, and it expects additional margin expansion in 2027 driven by lower cocoa costs. The report cites Hershey's current gross profit margin of 33.59% as a baseline for the anticipated gains. InvestingPro metrics noted in the briefing also assign the company an overall financial health score of "GOOD."
TD Cowen analyst Robert Moskow is quoted as saying that Hershey's management offered a logical explanation for their optimism on the margin trajectory.
Potential headwinds
Despite the positive margin outlook, TD Cowen emphasized that the pathway back to what it describes as "peak earnings" is not without risk. The firm identified several uncertain factors that could hinder performance, explicitly calling out the effect of GLP medications, potential cuts to SNAP benefits and shifts in discretionary consumer spending as cumulative headwinds that could alter results.
Recent financial performance
Hershey reported stronger-than-expected results for the fourth quarter of 2025. The company posted earnings per share of $1.71 versus an expected $1.40, representing a 22.14% surprise to the upside. Revenue for the quarter was $3.09 billion, ahead of the $2.97 billion forecast. Both metrics exceeded analyst estimates and are cited in the filing as evidence of robust operations during the period.
Implications for investors
The Cowen update blends an improved multi-year margin outlook with caution about demand-side risks. The revised target reflects a more favorable profit outlook while the Hold rating signals that, in Cowen's view, the current market price does not yet warrant an upgrade in conviction. Investors should weigh the margin drivers against the enumerated consumer and policy-related risks.