Piper Sandler has reaffirmed its Overweight rating on Hershey Co. and kept its price target at $249.00, citing improving cocoa cost dynamics and healthy retail performance as the key rationale. The stock is trading at $228.75, close to its 52-week high of $234.87, a reflection of recent investor confidence.
In its commentary, the firm points to an acceleration in cocoa cost declines. Piper Sandler said that if current pricing holds and cocoa costs remain near present levels, there could be significant upside to the firm’s 2027 earnings per share estimates. The note highlights that "stocks to grind" ratios are at levels not seen since the 2020-21 crop season and that surpluses on hand reduce the likelihood of an upside shock to cocoa prices.
Retail fundamentals also underpinned the analyst view. Pricing and volume mixed at retail were described as favorable, with retail sales growth of 8.9% in the latest weeks. That consumption momentum has coincided with a 27% year-to-date return for the stock and a 29% gain over the past six months.
Piper Sandler also flagged the potential for Hershey to restart share repurchases. While buybacks are not yet incorporated into the firm’s published model, the firm estimated that resumed repurchases could add approximately $0.30 to $0.40 or more to 2027 EPS.
Despite acknowledging upside drivers, Piper Sandler held its official earnings estimates steady, maintaining a $8.40 EPS forecast for 2026 and $9.00 for 2027. The firm additionally models a growing cash build on Hershey’s balance sheet.
The analyst write-up emphasized the scope for meaningful earnings upside stemming from falling cocoa costs while electing to leave published estimates unchanged for now.
Complementary analyst activity has reinforced the positive tone around Hershey following the company’s fourth-quarter results and 2026 guidance. Multiple firms have raised price targets in response to the announced outlook:
- Stifel increased its target to $230 while maintaining a Hold rating.
- Bernstein lifted its target to $250, pointing to Hershey’s 2026 EPS guidance of 30-35% growth, which it noted is substantially above the consensus estimate of 12%.
- DA Davidson raised its target to $243 and referenced an "accelerated path to earnings restoration."
- UBS set a new target at $236, citing strong organic sales growth and improved margins.
- TD Cowen raised its target to $210, highlighting expectations for significant gross margin recovery in 2026.
According to InvestingPro analysis cited in the coverage, the stock is currently overvalued relative to its Fair Value. The same analysis notes that 12 analysts have recently revised their earnings estimates upward for the upcoming period, a detail that supports the broader optimistic outlook among sell-side research teams.
Overall, the picture painted by Piper Sandler and other analysts is one where lower cocoa costs, favorable retail momentum, and potential capital returns combine to create meaningful upside to Hershey’s forward earnings profile. That said, the firm has elected to keep its formal EPS projections unchanged while modeling a growing cash balance for the company.
Sectors impacted: Consumer staples, food and beverage manufacturing, and commodities markets tied to cocoa.