Goldman Sachs has significantly upgraded its outlook on The Hershey Company (HSY), upgrading its recommendation from “sell” to “buy” and substantially raising its price target. This decisive move by one of Wall Street’s prominent financial institutions signals a potential inflection point for the confectionery giant, suggesting that previous headwinds are now largely priced into the stock and that operational improvements are poised to drive future growth.
The upgrade represents a two-step increase in Goldman Sachs’s rating for Hershey. Concurrently, the firm raised its 12-month price target for HSY shares from $170 to $222, implying a potential upside of over 19% from its recent closing price. Following this announcement, Hershey’s stock reacted positively, trading nearly 3% higher in Tuesday’s pre-market session, underscoring the market’s attention to such analyst revisions.
According to analyst Leah Jordan, the revised view stems from an attractive risk-return profile that has emerged after a period of several guidance cuts by the company. Key cost pressures, including those related to cocoa prices and tariffs, are now considered largely factored into market expectations. Furthermore, Jordan highlighted signs of clear market share recovery, which, coupled with a robust consumer environment and enhanced commercial performance, could translate into higher-than-expected earnings growth in 2026. This positive outlook is also underpinned by Hershey’s proven pricing power and its diversified portfolio of iconic brands.
Operational Strengths and Strategic Recovery
Hershey’s operational improvements have been central to Goldman’s upgraded assessment. After experiencing market share erosion in various categories over the past year, recent metrics indicate a rebound in seasonal chocolates, candies, and mints. This recovery is supported by targeted marketing efforts and innovation strategies designed to sustain momentum. A notable development is the progress in the convenience store channel, driven by Hershey’s “gold standard planogram” – an optimized shelf organization strategy. Approximately 50% of convenience stores have already implemented this model, with adoption projected to reach 60% by year-end, paving the way for a more constructive scenario through the latter half of 2025.
Despite Goldman Sachs’s bullish stance, the broader analyst consensus remains more cautious, with 17 out of 24 analysts currently maintaining a “hold” recommendation on Hershey shares. While Hershey’s year-to-date performance shows a 9% gain, it still trails the broader market. Nevertheless, Goldman Sachs’s upgraded recommendation strategically positions Hershey on the radar for investors seeking value within the consumer staples sector, suggesting that its unique insights could precede a broader market re-evaluation of the company’s prospects.
Michael Carter holds a BA in Economics from the University of Chicago and is a CFA charterholder. With over a decade of experience at top financial publications, he specializes in equity markets, mergers & acquisitions, and macroeconomic trends, delivering clear, data-driven insights that help readers navigate complex market movements.