Piper Sandler Upgrades Hershey as Cocoa Pressures Ease

Core Viewpoint - Piper Sandler upgraded The Hershey Company to Overweight from Neutral and raised its price target to $213.00 from $193.00, with shares rising more than 1% in pre-market trading [1] Group 1: Cocoa Costs and Growth Initiatives - Easing cocoa costs are no longer expected to be inflationary in 2026, and the removal of cocoa tariffs provides Hershey with increased flexibility to reinvest in growth while expanding earnings [2] - Early cocoa cost benefits have been allocated toward growth initiatives such as better-for-you offerings, salty snacks, international expansion, sweets, and premium products, allowing tariff relief to positively impact the bottom line [2] Group 2: Long-term Growth Projections - Growth from these investments is expected to support a more compelling long-term growth narrative, with Piper Sandler maintaining conservative projections of $7.23 EPS for 2026 and $7.73 EPS for 2027 [3] - The firm modeled increasing cash generation and raised its valuation multiple to 27.5x 2027 EPS, up from 25.0x previously [3]