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

Hershey’s stock price target has been increased by Morgan Stanley from $184.00 to $195.00, reflecting positive sentiment following the company’s recent financial performance. This adjustment, announced in a report on October 30, 2023, comes as Hershey continues to demonstrate strong earnings, surpassing market expectations.

Several other financial institutions have also reevaluated their positions on Hershey’s stock. TD Cowen lowered its target price from $204.00 to $200.00, maintaining a “hold” rating. Meanwhile, BNP Paribas Exane upgraded its rating from “neutral” to “outperform,” and JPMorgan Chase & Co. adjusted its target from $187.00 to $189.00, sustaining a “neutral” rating. Wells Fargo & Company increased its target from $154.00 to $157.00 but issued an “underweight” rating. On the other hand, Stifel Nicolaus reduced its target from $195.00 to $185.00 while keeping a “hold” rating.

As a whole, three analysts have given Hershey a “Buy” rating, while eighteen have assigned a “Hold” rating, and one has issued a “Sell” rating. According to data from MarketBeat, the average target price for Hershey is currently $182.79.

Strong Earnings Performance

Hershey reported impressive quarterly earnings on October 30, 2023, with earnings per share (EPS) of $1.30, exceeding the consensus estimate of $1.06 by $0.24. The company achieved a net margin of 11.84% and a return on equity of 32.08%. Revenue for the quarter reached $3.18 billion, surpassing expectations of $3.11 billion. This reflects a 6.5% increase in revenue compared to the same quarter last year. Hershey has set its earnings guidance for fiscal year 2025 at $5.90 to $6.00 per share, with analysts predicting an EPS of $6.12 for the current year.

Dividend Announcement and Insider Activity

In addition to its financial results, Hershey announced a quarterly dividend of $1.37 per share, scheduled for distribution on December 15, 2023. Investors of record as of November 17, 2023 will receive this dividend, which translates to an annualized yield of 3.0%. The company’s dividend payout ratio currently stands at 81.91%.

Insider trading activity has also been notable. Kirk Tanner, the company’s CEO, purchased 2,000 shares at an average price of $185.46 per share, totaling $370,920. This acquisition increased his ownership to 47,860 shares, valued at approximately $8.88 million. Meanwhile, Steven E. Voskuil, the CFO, sold 1,500 shares at an average price of $179.56, amounting to $269,340. This sale reduced his holdings to 55,319 shares, worth around $9.93 million. Over the past three months, insiders have sold a total of 6,000 shares valued at $1.1 million, with corporate insiders owning 0.34% of the stock.

Institutional investors have also been active in adjusting their stakes in Hershey. Choreo LLC increased its position by 3.6%, now holding 1,708 shares. Similarly, Fulton Bank N.A. raised its holdings by 4.9% and Bellevue Asset Management LLC boosted its position by 13.5%. Overall, institutional investors control 57.96% of Hershey’s stock.

The Hershey Company, known for its wide range of confectionery products, operates through three segments: North America Confectionery, North America Salty Snacks, and International. The company continues to adapt its strategy to meet consumer demands in a dynamic market.