Hershey (HSY) Is Up 6.0% After Gaining Tariff Exemption on Cocoa Imports – What's Changed

• Hershey recently became eligible for a tariff exemption on cocoa imports, which could reduce its quarterly import expenses by approximately US$50 million starting November 13, 2025.
• This exemption directly addresses one of Hershey's major cost pressures, as cocoa is a core input for its broad range of confectionery products.
• We'll examine how the anticipated reduction in cocoa import costs could reshape Hershey's outlook and overall investment narrative.

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Hershey Investment Narrative Recap

To be a Hershey shareholder, you have to believe in the company's ability to weather cyclical pressures in cocoa input costs while capturing value from its well-known brands and demand for confectionery. The recent tariff exemption on cocoa imports could ease one of the most significant short-term cost headwinds, supporting margins, but concerns remain about declining earnings and a competitive market, which are still the top risks to monitor. Notably, Hershey's most recent quarterly earnings showed sales growth despite a steep drop in net income, reflecting persistent margin pressures and validating the importance of cost relief measures. This context brings added weight to the tariff exemption, as it could help offset margin-related challenges in the short term, especially alongside ongoing innovation efforts and new product launches. However, even as the tariff exemption could improve margins, rising competition and changing consumer behavior remain risks that investors should be aware of...

Read the full narrative on Hershey (it's free!)

Hershey's outlook projects $12.2 billion in revenue and $1.8 billion in earnings by 2028. This assumes annual revenue growth of 4.3% and a $0.2 billion increase in earnings from the current $1.6 billion.

Uncover how Hershey's forecasts yield a $191.95 fair value, a 7% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members set fair value estimates for Hershey between US$137.71 and US$191.95, with nine unique perspectives. While opinions vary, many are keeping a close eye on whether cost relief from the cocoa tariff exemption will be enough to offset margin pressures over the coming quarters.

Explore 9 other fair value estimates on Hershey - why the stock might be worth as much as 7% more than the current price!

Build Your Own Hershey Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Hershey research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Hershey research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Hershey's overall financial health at a glance.

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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.

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