The Hershey Company Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

As you might know, The Hershey Company (NYSE:HSY) just kicked off its latest quarterly results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 5.8% to hit US$2.8b. Hershey also reported a statutory profit of US$2.26, which was an impressive 65% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following last week's earnings report, Hershey's 21 analysts are forecasting 2026 revenues to be US$12.3b, approximately in line with the last 12 months. Statutory earnings per share are predicted to swell 11% to US$8.25. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$12.2b and earnings per share (EPS) of US$7.98 in 2026. So the consensus seems to have become somewhat more optimistic on Hershey's earnings potential following these results.

View our latest analysis for Hershey

There's been no major changes to the consensus price target of US$206, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Hershey analyst has a price target of US$250 per share, while the most pessimistic values it at US$166. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Hershey's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 2.1% growth on an annualised basis. This is compared to a historical growth rate of 5.7% over the past five years. Compare this to the 133 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 2.2% per year. So it's pretty clear that, while Hershey's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Hershey following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$206, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Hershey analysts - going out to 2028, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Hershey that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.