Excerpt below from Barron’s piece titled, “How Hershey Stock Could Gain 9%”:

“…The result is that its operating profit margin is expected to fall almost five percentage points from 2023 to 19% this year.

The overall sales picture hasn’t been pretty either. Last year’s sales declined modestly to $11.16 billion. Healthier snacks have moved into favor with consumers and have replaced some shelf space at retailers for the chocolate bars and gummy candies Hershey sells.

Shares have been almost halved from record highs of $275 hit in spring 2023. They’re down 13% in the past month to $155—and down 24% since Barron’s recommended them last March. They now trade at just under 20 times expected earnings for the coming 12 months, below the S&P 500
’s 21 times. Historically, Hershey tends to trade at a hefty premium given its pricing power and earnings stability, strengths that make the stock look cheap if it can return to growth soon.

Cocoa prices will eventually stabilize after having gained more than threefold since spring 2023. They’re already down from their peaks, and that type of gain in commodity prices doesn’t tend to last. Analysts forecast that the cost of goods will rise less than 2% in 2026. That, combined with moderate price increases in its products and continued cost discipline, would nudge Hershey’s operating margin back up to 20%. Combine that with a stabilization or slight growth in volumes, and earnings can jump.”

Wow, HSY stock price has fallen back to its price level in Summer 2019! Had steady price appreciation from 2009-2023, and down 45% since! Well, our family at least is still steadily consuming similar levels of sweets & chocolate.