Hershey Shares Face Analyst Scrutiny Amid Cost Pressures

Market experts are maintaining a cautious stance on Hershey, the confectionery giant, despite a recent price target increase from Stifel Nicolaus. The firm's analysis underscores persistent concerns over rising input costs, which are seen as a significant headwind against otherwise solid operational performance.

In a recent client note, investment bank Stifel Nicolaus raised its price objective for Hershey shares to $195 from $185. However, the firm reaffirmed its "Hold" recommendation. Analysts pointed to sustained cost pressures, chiefly from historically high cocoa prices and tariff-related expenditures, which are expected to continue weighing on profitability. The stock was last trading near $180.58.

This adjustment aligns with a broader trend of guarded Wall Street sentiment. Earlier, on December 4, both Morgan Stanley and Jefferies issued their assessments. Morgan Stanley set a $195 target with an "Equal-Weight" rating, while Jefferies established a $181 target alongside a "Hold" rating. The consensus price target among 18 covering analysts stands at approximately $180.39, implying minimal expected movement over the next year. The predominant "Hold" view reflects a wait-and-see approach, balancing recognition of the company's powerful brand portfolio against macroeconomic challenges.

Should investors sell immediately? Or is it worth buying Hershey?

Solid Results Meet a Tough Environment

The analyst community's tempered outlook contrasts with Hershey's recent strong quarterly report. For Q3 2025, the company delivered earnings per share (EPS) of $1.30, surpassing the $1.06 forecast. Revenue reached $3.18 billion. Following these results, management raised its full-year guidance for adjusted EPS to the upper half of the previously stated $5.90 to $6.00 range.

Companies in the confectionery space remain highly exposed to agricultural commodity volatility. Hershey's strategic response has involved pricing actions, supply chain optimization, and diversifying its portfolio. The acquisition of snack maker LesserEvil in November represents a key part of this diversification effort.

For investors, the next significant catalyst will be the release of fourth-quarter earnings and the accompanying outlook for fiscal 2026. Until then, the equity's valuation is likely to remain tightly linked to the market's perception of Hershey's ability to navigate elevated input costs successfully.