Finance Halo
Company Overview
The Hershey Company (HSY) is a leading global confectionery company, renowned for its iconic chocolate and snack brands. Core business segments include U.S. Confectionery, U.S. Snacks, and International. Hershey holds a significant market share in North America and is strategically expanding its international presence. The company is focused on driving growth through innovation, brand building, and category expansion, with a strong emphasis on snacking and portion control.
Price Action Analysis
Daily Chart (3-month): The daily chart shows a generally bullish trend over the past three months, with the price oscillating between approximately $160 and $220. Recent action, particularly in the last month, indicates a strong upward momentum. The price has made a decisive break above the $190-$200 resistance zone, supported by increasing volume. Candlestick patterns suggest increasing buying pressure, with several bullish engulfing patterns and marubozu candles appearing as the price approaches new highs. The volume has been notably higher during upward price movements, indicating conviction behind the trend.
Weekly Chart (2-year): The weekly chart provides a longer-term perspective, revealing a well-established uptrend over the past two years, albeit with periods of consolidation and pullbacks. Key support is observed around the $140-$160 range, where the price has found footing multiple times. Resistance appears to have been tested and broken around the $190-$200 levels, aligning with the daily chart observations. The recent price surge on the daily chart is reflected as a strong bullish move on the weekly chart, breaking out of a multi-month consolidation pattern. Volume on the weekly chart has seen an uptick in recent weeks, coinciding with the acceleration of the uptrend.
News & Catalysts
The recent news indicates that Hershey (HSY) reported strong Q4 2025 earnings, with both EPS and revenue exceeding analyst expectations. This positive performance, driven by a 7.0% increase in net sales and significant growth in its salty snacks segment, led to an approximately 3.02% rise in stock price in pre-market trading. Analysts have responded favorably, with several, including those from UBS and Piper Sandler, upgrading their price targets. For instance, UBS raised its target to $210 and Piper Sandler initiated an 'Overweight' rating with a $213 target. The company has also announced a higher quarterly dividend, signaling confidence from management.
Despite these positives, headwinds such as high cocoa costs due to supply issues in West Africa are a concern, although Hershey's hedging strategy is expected to mitigate immediate impacts. The company has provided a positive outlook for 2026, forecasting net sales growth of 4-5% and a substantial increase in adjusted EPS. These factors collectively suggest a positive sentiment and potential for continued upward momentum in the stock price.
Fondamental analysis
Key Financial Metrics
| Metric | Value | YoY Change |
|---|---|---|
| Revenue | $11.70B | +4.4% |
| Gross Margin | 39.5% | -1.1pp |
| Operating Margin | 19.0% | -1.5pp |
| Net Income | $1.70B | -10.0% |
| EPS (Diluted) | $3.65 | -9.0% |
| Current Ratio | 0.70 | -0.10 |
| Debt to Equity Ratio | 75.50 | +2.00 |
Earnings Summary & Estimates
| Metric | Latest | Next Quarter Estimate | YoY Growth (Est.) |
|---|---|---|---|
| Revenue | $3.09B (Q4 2025) | $2.80B | +5.0% |
| EPS | $1.71 (Q4 2025) | $1.55 | +32.0% |
Analyst Price Targets & Recommendations
| Analyst Firm | Latest Rating | Price Target | Consensus Rating |
|---|---|---|---|
| Jefferies | Neutral | $207 | Hold |
| UBS | Buy | $210 | Hold |
| Piper Sandler | Overweight | $213 | Hold |
Key Takeaways:
- Revenue Growth: Hershey has demonstrated consistent revenue growth, with projections for continued expansion in 2026, particularly driven by its salty snacks segment.
- Margin Pressure: Recent performance shows some margin contraction, largely attributed to rising cocoa costs. However, the company's hedging strategies and focus on premiumization are expected to support margin recovery.
- Earnings Outlook: Despite a recent dip in EPS, the outlook for 2026 is strong, with significant year-over-year growth anticipated. This is supported by upcoming product innovations and strategic investments.
- Valuation: While not explicitly detailed here, recent analyst price targets suggest a moderate upside from current levels, with consensus leaning towards a 'Hold' rating. The dividend increase signals management's confidence in future earnings and cash flow.
- Ownership: Major institutional holders and insider transactions would provide further insights into ownership structure and management's conviction, which are not detailed in the summary.
Market & Sentiment Context
Market Context: The broader consumer staples sector, to which Hershey belongs, has shown resilience amidst economic uncertainty. However, it can be sensitive to input cost inflation (like cocoa prices) and shifts in consumer discretionary spending. Recent market trends may favor companies with strong brand loyalty and pricing power, which HSY possesses. The current risk-on sentiment, if sustained, could benefit consumer discretionary spending, indirectly aiding HSY's performance.
Investor Sentiment: The price action, characterized by increasing volume accompanying upward price movements on both daily and weekly charts, suggests positive investor sentiment and accumulation. The stock has broken out of a consolidation range, indicating renewed buying interest and conviction in its upward trajectory. The recent analyst upgrades and positive forward guidance further bolster this sentiment, suggesting that the market anticipates continued strength.
Investment Outlook
The outlook for The Hershey Company appears positive, supported by strong fundamental trends and favorable price action. The company's strategic focus on innovation, particularly in the high-growth salty snacks category, coupled with international expansion, positions it well for sustained revenue growth. While input cost pressures remain a factor, management's proactive hedging and pricing strategies aim to mitigate these risks and support margin recovery.
The recent bullish breakout on the charts, supported by increasing volume and positive analyst sentiment, indicates that the upward momentum is likely to continue. The company's commitment to returning capital to shareholders via dividends further enhances its appeal.
Key Buy/Sell Levels
The current price for HSY is $224.38.
Support Levels:
-
$200-$205 Zone: This level acted as significant resistance and has now potentially flipped to support following the recent breakout.
- Touched: Yes, the price recently consolidated around this level before breaking higher.
- Distance from Current Price: N/A (already broken through and is now below the current price). This zone is now considered a strong support area to watch for any pullbacks.
-
$180-$190 Zone: This represents a more substantial support area, which was a multi-month resistance before being broken.
- Touched: No, this level is significantly below the current price.
- Distance from Current Price: Approximately $34.38 - $44.38 ($34.38 lower, ~15.3% decrease).
Resistance Levels:
-
$225-$230 Zone: This is the immediate resistance area, close to the current price and potentially forming a new consolidation range.
- Touched: Yes, the price has briefly touched and slightly exceeded this level today.
- Distance from Current Price: Approximately $0.62 - $5.62 ($0.62 higher, ~0.3% increase).
-
$240-$250 Zone: This represents the next significant psychological and potential resistance level based on longer-term chart patterns and projected growth.
- Touched: No.
- Distance from Current Price: Approximately $15.62 - $25.62 ($15.62 higher, ~6.96% increase).
I will now draw these levels on the chart. These levels correspond with previous resistance/support zones and provide key reference points for traders. The $200-$205 zone is a critical area where prior resistance was encountered and subsequently broken, now expected to act as support. The $180-$190 zone represents a more significant historical support level. On the resistance side, the $225-$230 zone is an immediate hurdle, while $240-$250 is a longer-term target that may provide further resistance.
Summary & Takeaways
The Hershey Company (HSY) is exhibiting strong upward momentum, supported by robust financial performance and positive analyst sentiment. The company's strategic initiatives, including growth in its snack segment and international expansion, are driving revenue. While facing challenges from input cost inflation, HSY's hedging and pricing strategies, along with a positive 2026 outlook, suggest resilience and potential for margin recovery.
Technically, the stock has broken out of a consolidation pattern on both daily and weekly charts, with increasing volume indicating strong buying interest. Key support levels are identified at $200-$205 and $180-$190, while immediate resistance lies around $225-$230, followed by $240-$250. Given the current price action and fundamentals, HSY presents a potentially attractive investment opportunity for those looking for exposure to a well-established consumer staples company with continued growth potential.