The Hershey Company: Refining estimates on scanner and incremental freight pressure

Research evidence excerpt

The Hershey Company: Refining estimates on scanner and incremental freight pressure

ndhy@bofa.com

company gross margin expansion compared to previously expected “nearly 300bps Chris Downing

expansion.” Our NA Salty and Enterprise level gross margin estimates move lower as a ResearchBofAS Analyst

result. Other 2Q items to keep in mind: 1) reversal of 1Q’s 5pts of inventory stocking in +1 646 855 4345

christopher.downing@bofa.com

International to mitigate global shipping disruptions, 2) shorter Easter, 3) delayed media

spend slipping into 2Q.

Reiterate Neutral rating and lower PO to $200 Stock Data

We reiterate our Neutral rating and lower our PO to $200, now based on 20.5x our CY27

Price 183.04 USD

EPS estimate (prior $220 on 22.5x), which reflects our lower 2Q estimates and some

Price Objective 200.00 USD

caution about scanner data. This is justified, in our view, as HSY has a range of dynamics

Date Established 24-Jun-2026

coming into play in 2026, including cocoa uncertainty and some topline potential for

Investment Opinion B-2-7

increased demand elasticity, offset by its cost savings initiative, gross margin recovery,

52-Week Range 160.07 USD - 239.48 USD

innovation pipeline, and low private label exposure compared to its peer set.

Mrkt Val (mn) / Shares Out 37,328 USD / 203.9

(mn)

Estimates (Dec) (US$) 2024A 2025A 2026E 2027E 2028E

Free Float 98.6%

EPS 9.37 6.31 8.32 9.80 10.50

EPS Change (YoY) -2.3% -32.7% 31.9% 17.8% 7.1% Average Daily Value (mn) 401.86 USD

Consensus EPS (Bloomberg) 8.49 9.96 10.75 BofA Ticker / Exchange HSY / NYS

Consensus EPS (Visible Alpha) 8.44 9.92 10.71 Bloomberg / Reuters HSY US / HSY.N

DPS 5.48 5.48 5.81 5.81 5.81 ROE (2026E) 34.4%

Net Dbt to Eqty (Dec-2025A) 85.7%

Valuation (Dec)

P/E 19.1x 28.4x 21.5x 18.3x 17.1x