Hershey (HSY) faces continued pressure from consumer weakness and rising input costs, potentially weighing on its 2027 results, despite reporting better-than-expected Q3 revenue and earnings, RBC Capital said in a Friday note.
The brokerage said ongoing market share losses, particularly in convenience stores, and higher freight and logistics costs could push 2027 results toward the lower end of guidance, despite Hershey's plans to expand its innovation pipeline by 50%, which is expected to contribute three times more to growth.
For 2026, Hershey raised its net sales growth outlook to 5% and adjusted earnings growth to 36% to 38.5%, including tariff refunds, while maintaining its 32.5% to 35% earnings growth outlook excluding refunds and expecting about 3% organic sales growth, according to the report.
For 2027, Hershey maintained its sales growth outlook of 2% to 4% and adjusted earnings growth of 15% to 20%, excluding the 2026 tariff refund benefit, though consumer weakness and higher costs could weigh on results, the report added.
RBC maintained its sector perform rating on the stock and lowered its price target to $190 from $206.
Hershey shares were up 3.3% in Friday trading.
Price: 165.34, Change: +5.06, Percent Change: +3.16
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