Hershey Stock (NYSE:HSY), Trade Ideas

Hershey

Hershey is a leading confectionery manufacturer in the us (around a $25 billion market), controlling around 36% of the domestic chocolate space (per Euromonitor). Beyond its namesake label, the firm's mix has expanded over the last 85 years and now consists of 100 brands, including Reese's, Kit Kat, Kisses, and Ice Breakers. Hershey's products are sold in about 80 countries, albeit with just a high-single-digit percentage of sales coming from markets outside the us, including Brazil, India, and Mexico. The firm has sought inorganic opportunities to extend its reach beyond its core confection business, adding Amplify Snack Brands and its Skinny Pop ready-to-eat popcorn to its mix, Pirate Brands, and Dot's Pretzels over the past few years.

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These changes are a reaction to the persistent price increases over recent years.

Food Giants Pivot To Discounts And New Sizes Amid Decreased Spending by Low-Income Americans

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Cocoa&#39;s Rise Outpaces Bitcoin As Hedge Funds Have &#39;Biggest Risk Exposure To Cocoa Ever&#39; — Chocolate Becoming A Luxury

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As cocoa prices surge, Hershey Co and Mondelez reportedly pivot Easter promotions towards non-chocolate treats, mitigating profit pressures. With cocoa prices tripling due to West African bean disease, companies focus on holiday sales to offset inflation-driven consumer reluctance, stressing the significance of Easter in confection sales.

Cocoa Cost Crunch: Chocolate Giants Hershey, Mondelez Reportedly Shift Easter Focus To Sweeten Profits

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Wells Fargo analyst Chris Carey maintains Hershey (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HSY#NYSE">HSY</a>) with a Equal-Weight and lowers the price target from $205 to $200.

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Wells Fargo Maintains Equal-Weight on Hershey, Lowers Price Target to $200

Piper Sandler analyst Michael Lavery maintains Hershey (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HSY#NYSE">HSY</a>) with a Neutral and lowers the price target from $200 to $179.

Piper Sandler Maintains Neutral on Hershey, Lowers Price Target to $179

Citigroup analyst Thomas Palmer maintains Hershey (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HSY#NYSE">HSY</a>) with a Neutral and lowers the price target from $213 to $199.

Citigroup Maintains Neutral on Hershey, Lowers Price Target to $199

In light of the economic pressures on low-income households, leading food corporations are revamping their product lines and marketing strategies. This pivot aims to accommodate the changing spending habits as consumers face financial constraints.
What Happened: Companies such as Kraft Heinz (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KHC#NASDAQ">KHC</a>) and Conagra Brands (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CAG#NYSE">CAG</a>) are altering their offerings in response to the decreased spending by Americans dependent on government assistance, Reuters reported on Monday. These changes are a reaction to the persistent price increases over recent years.
Low-income consumers, typically earning below $35,000 a year, are now more inclined to cook from scratch or reduce their purchases, affecting sales volumes for major food and beverage producers. Dollar Tree (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DLTR#NASDAQ">DLTR</a>) CEO Richard Dreiling emphasized the difficulties posed by reduced SNAP benefits during a recent earnings call. At Circle K stores, part of Alimentation Couche-Tard (TSX:<a class="ticker" href="https://www.benzinga.com/stock/ATD#TSX">ATD</a>), there has been a notable 40% decline in food stamp sales year-over-year, as stated by CEO Brian Hannasch.
Conagra is set to introduce budget-friendly Banquet chicken patties in late May, marking a departure from the premium-centric approach prevalent during the pandemic. 
Now food companies must "make sure they are attracting the value buyer back into the fold," said Duleep Rodrigo, U.S. consumer and retail sector leader at KPMG. 
"They can't get volume without this key segment."
See Also: <a href="https://www.benzinga.com/news/24/04/38131413/trumps-niece-says-ny-attorney-general-letitia-james-doing-perfect-job-holding-ex-president-accountab?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Trump&#8217;s Niece Says NY Attorney General Letitia James Doing Perfect Job Holding Ex-President Accountable Every Step Of Way: &#8216;No One Can Sidestep The Law&#8217;</a>
Adjustments are also being made by Hershey (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HSY#NYSE">HSY</a>), PepsiCo (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PEP#NASDAQ">PEP</a>), and Coca-Cola (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KO#NYSE">KO</a>) in their product sizes and promotions to provide better deals. Nissin Foods is leveraging promotions to encourage stockpiling, while food giants like Kraft Heinz, WK Kellogg (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/K#NYSE">K</a>), and Kellanova (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/K#NYSE">K</a>) are increasing discounts, according to a Jefferies research note.
Conagra&#8217;s CEO Sean Connolly spoke of a strategy involving more regular, modest discounts to attract consumers. Chicago resident Charsetta Reed, for example, is turning to Dollar Tree for more economical grocery options. Conagra&#8217;s canned meats and corn-based snacks are witnessing a rise in sales, as are Jif peanut butter products from J.M. Smucker (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SJM#NYSE">SJM</a>), a cost-effective protein choice.
Why It Matters: The strategic shift by food companies comes against a backdrop of growing financial strain on American households. Food has become the<a href="https://www.benzinga.com/personal-finance/24/03/37623381/americans-struggle-as-food-becomes-third-biggest-expense-for-household-budgets-see-how-your-budg"> third-largest household expense</a>, with the average American household spending about $6,080 monthly on a $94,003 income, based on 2022 data from the U.S. Bureau of Labor Statistics.
Moreover, 73% of Gen Z have<a href="https://www.benzinga.com/personal-finance/24/04/38020257/the-economy-is-taking-its-toll-on-gen-z-73-have-changed-their-spending-habits-because-of-increas"> altered their spending habits</a> due to rising prices, underscoring the widespread impact of inflation across demographics. These economic conditions are prompting food companies to reassess and adapt their strategies to maintain sales and meet the needs of cost-conscious consumers.
Read Next: <a href="https://www.benzinga.com/news/24/04/38133891/donald-trump-says-it-would-be-a-great-honor-if-he-were-jailed-for-breaching-gag-order-i-will-gladly?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Donald Trump Says It Would Be A &#8216;Great Honor&#8217; If He Were Jailed For Breaching Gag Order: &#8216;I Will Gladly Become A Modern Day Nelson Mandela&#8217;</a>
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Investors who have bought and held Bitcoin have done well for themselves, but those in cocoa have amassed riches of their own.
The price of cocoa has doubled to start 2024 and tripled over the last 12 months.
"The worst is still yet to come," Rabobank commodities analyst Paul Joules said.
The world is facing the largest deficit of cocoa supply in over 60 years. The International Cocoa Organization forecasts a shortage increase of 405% compared to last season.
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With roughly two-thirds of the world's cocoa production in West Africa, extreme weather in the region has made it more difficult to grow healthy cocoa crops and transport them to ports for international shipment.
Unlike other supply and demand imbalances, it's not easy to increase the supply of cocoa quickly. Trees in West Africa have been aging and yielding less cocoa over the years and farmers have had trouble getting the diseases impacting cocoa crops under control.
Hedge funds that have piled into the commodity are benefiting from the situation, with over $8.7 billion in bets via cocoa futures products that the commodity will continue to rise.
The bets have further raised the price of cocoa. Martijn Bron, a former global head of cocoa and chocolate trading for Cargill Inc., said hedge funds probably have the "biggest risk exposure to cocoa that they've ever had."
Trending: This startup coined &#8220;eBay for gamers&#8221; with a breathtaking track record has opened up<a href="https://www.benzinga.com/money/gameflip-2"> a window to invest in its future growth</a>.
Meanwhile, the rapid price appreciation of cocoa has impacted shares of chocolate companies such as Hershey Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HSY#NYSE">HSY</a>), which has seen its stock fall about 23% in the past year. It&#8217;s also led to sell-side analysts hitting the company with downgrades.
Morgan Stanley recently issued an underweight rating on Hershey in large part because of the steep rise in cocoa impacting its gross margins. BNP Paribas also issued a downgrade.
With consumers sensitive to prices after enduring the worst inflation in 40 years, cocoa prices might turn regular chocolate bars into luxury goods.
Or they could be another victim of shrinkflation where companies create smaller chocolate bars sold at the same price or use less cocoa in their products.
Read Next:
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<li>Long overdue disruption in the moving industry is underway.<a href="https://www.benzinga.com/money/muvr"> Here&#8217;s how to invest in it with just $100</a>.</li>
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Cocoa's Rise Outpaces Bitcoin As Hedge Funds Have 'Biggest Risk Exposure To Cocoa Ever' — Chocolate Becoming A Luxury

Hershey Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HSY#NYSE">HSY</a>), Mondelez International Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MDLZ#NASDAQ">MDLZ</a>), and other confection-makers are reportedly adapting strategies to mitigate the impact of soaring cocoa prices on their profits ahead of Easter.
Promotions are pivoting towards non-chocolate treats amid escalating cocoa costs, according to a report from Reuters.
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com//node/37934123" rel="noreferrer noopener">Hershey &#8216;Shrinkflation&#8217;: Chocolate Makers&#8217; Cost Chaos As Cocoa Reaches $10,000 Per Metric Ton</a>
With cocoa prices tripling in the past year due to bean disease in West Africa, companies like Hershey and Mondelez are focusing on Easter sales to offset profit pressures.
Rising inflation prompts consumer reluctance, emphasizing the importance of holiday sales for confection-makers.
Easter sales in the U.S., the largest chocolate market, are forecasted to maintain last year&#8217;s level, fueled mainly by price hikes rather than increased volumes sold, Reuters cited the National Confectioners Association.
The report further quoted David Branch from Wells Fargo Agri-Food Institute, who emphasized the impact of consumer behavior shifts, with holiday purchases compensating for reduced impulse buying throughout the year.
Despite challenges, Hershey remains optimistic, attributing consistent Easter sales to the preservation of traditions like chocolate bunnies and egg hunts.
Also, Mondelez reportedly eyes upscale Easter offerings targeting families willing to splurge on premium chocolate amid rising prices.
Price Action: HSY shares are trading flat at $192.26 on the last check Tuesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Wikimedia Commons

Exane BNP Paribas analyst Max Gumport downgrades Hershey (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HSY#NYSE">HSY</a>) from Outperform to Neutral and announces $208 price target.

Downgrades

Exane BNP Paribas Downgrades Hershey to Neutral, Announces $208 Price Target

The chocolate industry looks a bit hairy in the run-up to Easter — a particularly choc-heavy holiday.
What Happened: Cocoa broke through a milestone, pushing for the first time through the $10,000 per metric ton level.
That means, in just 50 days, the price of cocoa has doubled.
Candy producer Hershey Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HSY#NYSE">HSY</a>) has already said it expects historically high cocoa prices to limit earnings growth this year, but that was more than a month ago. 
This is a rise even more meteoric than that of Nvidia Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>), which <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37544925/apple-vs-nvidia-only-one-added-1-trillion-in-67-days-as-battle-for-mega-cap-dominan">added $1 trillion to its market cap</a> in the first 67 days of 2024.
On Monday, Feb. 5, the beginning of the week of Hershey&#8217;s fourth-quarter earnings report, U.S. Cocoa Futures opened at $5,035 per metric ton (tonne). This was already a record high following seven consecutive sessions of gains, and the price was already up 24% since the start of the year.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/26080552/newplot-2024-03-26T120537.785.png" alt="" class="wp-image-265444" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/26080552/newplot-2024-03-26T120537.785.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/26080552/newplot-2024-03-26T120537.785-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
Also Read: <a href="https://www.benzinga.com/markets/equities/24/02/37394501/is-my-candy-bar-getting-smaller-yes-a-chocolate-crisis-means-smaller-pricier-hersheys">Is My Candy Bar Getting Smaller? Yes, A Chocolate Crisis Means Smaller, Pricier Hershey&#8217;s</a>
<h2 class="wp-block-heading">Weather And Disease Hit Crops</h2>
"Recent heatwaves and extreme weather events in West Africa, where the vast majority of cocoa is produced, have severely impacted cocoa crops, leading to shortages and soaring prices,&#8221; said Simon Geale, at supply chain industry company Proxima, <a href="https://www.confectioneryproduction.com/news/47568/easter-chocolate-shortages-warning-as-price-rises-bite-over-cocoa-supply-challenges/">speaking</a> to Confectionary Production. 
&#8220;This is unwelcome news in the run-up to Easter,&#8221; he added, &#8220;as these challenges will inevitably trickle down to consumers. We've already witnessed chocolate makers increasing prices in response to rising cocoa costs. This year, consumers may notice smaller Easter eggs or a shift towards more premium-priced products on the shelves.&#8221;
Recent heatwaves and extreme weather, don&#8217;t explain it all, however. 
West African crops have also been exposed to disease which makes them less productive. And these aren&#8217;t problems that can be dealt with simply by chucking on more pesticides.
West African cocoa farmers, from decades of profiteering by governments and commodity merchants, are also extremely poor. They&#8217;ve nothing left over from annual sales of their crops to reinvest in new plantings. And it is these aging cocoa plants that are more susceptible to disease and weather extremes.
Commodity analysts are now forecasting an ever-growing likelihood of a cocoa market deficit this year — meaning supply will be unable to meet demand. 
Warren Patterson suspects a supply deficit of 374,000 tonnes, based on International Cocoa Organization data. &#8220;This would be higher than the deficit of 74,000 tonnes seen last year,&#8221; Patterson said.
Meanwhile, chocolate producers such as Hershey and Mondelez International Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MDLZ#NASDAQ">MDLZ</a>) have issued warnings about the risk to their bottom lines. Shares in both companies have fallen slightly in the past three months.
<h2 class="wp-block-heading">Shrinkflation For Consumers</h2>
Consumer prices for chocolate products are rising and pack sizes are getting smaller — &#8220;shrinkflation&#8221; according to Bloomberg&#8217;s commodity columnist Javier Blas.
Blas <a href="https://twitter.com/JavierBlas/status/1772590152050749743">posted</a> on X on Monday: &#8220;In nominal terms, cocoa prices have surged to $10,000 — up from around $2,500 a year ago, and around $650 a decade ago. To put things into perspective: the previous record, which only fell in February after 46 years unbroken, was around $5,500.&#8221;
But putting things in further perspective, at least consumers aren&#8217;t dealing with levels seen during the 1970s — the days of oil crises and almost hyperinflation.
Blas noted: &#8220;In real terms, adjusted by the cumulative impact of inflation, cocoa is still trading well below the peak set in the 1970s. The record high established 46 years ago equals to $27,000 a ton in today's money.&#8221;
Benzinga reached out to both Hershey and Mondelez for comment, but had received no reply at time of publish. We&#8217;ll update if comment is received.
Now Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37900275/agriculture-commodities-rise-to-9-year-highs-cocoa-prices-skyrocket-chocolate-lover">Agriculture Commodities Rise To 9-Year Highs, Cocoa Prices Skyrocket: Chocolate Lovers Brace For Hyperinflation</a>
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Hershey 'Shrinkflation': Chocolate Makers' Cost Chaos As Cocoa Reaches $10,000 Per Metric Ton

Hershey shares are trading lower. The stock may be under pressure amid rising cocoa prices.

Deep-pocketed investors have adopted a bearish approach towards Hershey (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HSY#NYSE">HSY</a>), and it's something market players shouldn't ignore. Our tracking of public options records at Benzinga unveiled this significant move today. The identity of these investors remains unknown, but such a substantial move in HSY usually suggests something big is about to happen.
We gleaned this information from our observations today when Benzinga's options scanner highlighted 14 extraordinary options activities for Hershey. This level of activity is out of the ordinary.
The general mood among these heavyweight investors is divided, with 35% leaning bullish and 64% bearish. Among these notable options, 10 are puts, totaling $1,493,990, and 4 are calls, amounting to $131,389.
<h3>Projected Price Targets</h3>
Analyzing the Volume and Open Interest in these contracts, it seems that the big players have been eyeing a price window from $175.0 to $210.0 for Hershey during the past quarter. 
<h3>Analyzing Volume &amp; Open Interest</h3>
In today's trading context, the average open interest for options of Hershey stands at 811.92, with a total volume reaching 4,168.00. The accompanying chart delineates the progression of both call and put option volume and open interest for high-value trades in Hershey, situated within the strike price corridor from $175.0 to $210.0, throughout the last 30 days.
<h3>Hershey Call and Put Volume: 30-Day Overview</h3>
<img src="https://www.benzinga.com/files/images/story/2024/1711395973_0.png" alt="Options Call Chart" />
<h3>Significant Options Trades Detected:</h3>

<table>
<thead>
<tr>
<th>Symbol</th>
<th>PUT/CALL</th>
<th>Trade Type</th>
<th>Sentiment</th>
<th>Exp. Date</th>
<th>Strike Price</th>
<th>Total Trade Price</th>
<th>Open Interest</th>
<th>Volume</th>
</tr>
</thead>
<tbody>
<tr>
<td>HSY</td>
<td>PUT</td>
<td>TRADE</td>
<td>BEARISH</td>
<td>05/17/24</td>
<td>$185.00</td>
<td>$930.0K</td>
<td>1.0K</td>
<td>3.0K</td>
</tr>
<tr>
<td>HSY</td>
<td>PUT</td>
<td>SWEEP</td>
<td>BEARISH</td>
<td>08/16/24</td>
<td>$180.00</td>
<td>$143.1K</td>
<td>204</td>
<td>1</td>
</tr>
<tr>
<td>HSY</td>
<td>PUT</td>
<td>SWEEP</td>
<td>BEARISH</td>
<td>04/19/24</td>
<td>$190.00</td>
<td>$137.1K</td>
<td>356</td>
<td>535</td>
</tr>
<tr>
<td>HSY</td>
<td>PUT</td>
<td>SWEEP</td>
<td>BEARISH</td>
<td>09/20/24</td>
<td>$200.00</td>
<td>$80.9K</td>
<td>17</td>
<td>57</td>
</tr>
<tr>
<td>HSY</td>
<td>PUT</td>
<td>SWEEP</td>
<td>BEARISH</td>
<td>01/17/25</td>
<td>$200.00</td>
<td>$46.7K</td>
<td>648</td>
<td>28</td>
</tr>
</tbody>
</table>

<h3>About Hershey</h3>
Hershey is a leading confectionery manufacturer in the US (around a $25 billion market), controlling around 36% of the domestic chocolate space (per Euromonitor). Beyond its namesake label, the firm's mix has expanded over the last 85 years and now consists of 100 brands, including Reese's, Kit Kat, Kisses, and Ice Breakers. Hershey's products are sold in about 80 countries, albeit with just a high-single-digit percentage of sales coming from markets outside the US, including Brazil, India, and Mexico. The firm has sought inorganic opportunities to extend its reach beyond its core confection business, adding Amplify Snack Brands and its Skinny Pop ready-to-eat popcorn to its mix, Pirate Brands, and Dot's Pretzels over the past few years.
Having examined the options trading patterns of Hershey, our attention now turns directly to the company. This shift allows us to delve into its present market position and performance
<h3>Hershey's Current Market Status</h3>
<ul>
<li>Currently trading with a volume of 1,051,366, the HSY's price is down by -0.07%, now at $197.85. </li>
<li>RSI readings suggest the stock is currently may be approaching overbought.</li>
<li>Anticipated earnings release is in 31 days.</li>
</ul>
<h3>Expert Opinions on Hershey</h3>
A total of 1 professional analysts have given their take on this stock in the last 30 days, setting an average price target of $213.0.
<ul>
<li>Reflecting concerns, an analyst from RBC Capital lowers its rating to Sector Perform with a new price target of $213.</li>
</ul>
Trading options involves greater risks but also offers the potential for higher profits. Savvy traders mitigate these risks through ongoing education, strategic trade adjustments, utilizing various indicators, and staying attuned to market dynamics. Keep up with the latest options trades for Hershey with <a href="https://benzinga.grsm.io/register174">Benzinga Pro</a> for real-time alerts.

Options

Check Out What Whales Are Doing With HSY

<a href="https://thebearcave.substack.com/p/more-problems-at-hershey-hsy" title="https://thebearcave.substack.com/p/more-problems-at-hershey-hsy">https://thebearcave.substack.com/p/more-problems-at-hershey-hsy</a>

Short Sellers

Trading Ideas

Watching The Hershey Company; The Bear Cave Issues Report On Co Titled "More Problems At Hershey (HSY)"

Hershey's (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HSY#NYSE">HSY</a>) short percent of float has fallen 7.21% since its last report. The company recently reported that it has 2.58 million shares sold short, which is 1.93% of all regular shares that are available for trading. Based on its trading volume, it would take traders 1.14 days to cover their short positions on average.
<h3>Why Short Interest Matters</h3>
Short interest is the number of shares that have been sold short but have not yet been covered or closed out. <a href="https://www.benzinga.com/money/how-to-short-a-stock/">Short selling</a> is when a trader sells shares of a company they do not own, with the hope that the price will fall. Traders make money from short selling if the price of the stock falls and they lose if it rises.
Short interest is important to track because it can act as an indicator of market sentiment towards a particular stock. An increase in short interest can signal that investors have become more bearish, while a decrease in short interest can signal they have become more bullish.
See Also: <a href="https://www.benzinga.com/short-interest">List of the most shorted stocks</a>
<h3>Hershey Short Interest Graph (3 Months)</h3>
<img src="https://www.benzinga.com/files/images/story/2024/1710947714_0.png" alt="short_fig" />
As you can see from the chart above the percentage of shares that are sold short for Hershey has declined since its last report. This does not mean that the stock is going to rise in the near-term but traders should be aware that less shares are being shorted.
<h3>Comparing Hershey's Short Interest Against Its Peers</h3>
Peer comparison is a popular technique amongst analysts and investors for gauging how well a company is performing. A company's peer is another company that has similar characteristics to it, such as industry, size, age, and financial structure. You can find a company's peer group by reading its 10-K, proxy filing, or by doing your own similarity analysis.
According to <a href="https://pro.benzinga.com/">Benzinga Pro</a>, Hershey's peer group average for short interest as a percentage of float is 4.25%, which means the company has less short interest than most of its peers.
Did you know that increasing short interest can actually be bullish for a stock? <a href="https://www.benzinga.com/money/how-to-make-money-on-a-short-squeeze/">This post by Benzinga Money explains how you can profit from it.</a>
This article was generated by Benzinga's automated content engine and was reviewed by an editor.

Short Ideas

(HSY) - Analyzing Hershey's Short Interest

RBC Capital analyst Nik Modi reiterates Hershey (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HSY#NYSE">HSY</a>) with a Sector Perform and maintains $213 price target.

Reiteration

RBC Capital Reiterates Sector Perform on Hershey, Maintains $213 Price Target

'African Cocoa Plants Run Out Of Beans As Global Chocolate Crisis Deepens'

Whales with a lot of money to spend have taken a noticeably bearish stance on Hershey.
Looking at options history for Hershey (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HSY#NYSE">HSY</a>) we detected 8 trades.
If we consider the specifics of each trade, it is accurate to state that 25% of the investors opened trades with bullish expectations and 75% with bearish.
From the overall spotted trades, 4 are puts, for a total amount of $327,320 and 4, calls, for a total amount of $198,189.
<h3>Projected Price Targets</h3>
Analyzing the Volume and Open Interest in these contracts, it seems that the big players have been eyeing a price window from $190.0 to $210.0 for Hershey during the past quarter. 
<h3>Volume &amp; Open Interest Development</h3>
Assessing the volume and open interest is a strategic step in options trading. These metrics shed light on the liquidity and investor interest in Hershey's options at specified strike prices. The forthcoming data visualizes the fluctuation in volume and open interest for both calls and puts, linked to Hershey's substantial trades, within a strike price spectrum from $190.0 to $210.0 over the preceding 30 days.
<h3>Hershey Option Activity Analysis: Last 30 Days</h3>
<img src="https://www.benzinga.com/files/images/story/2024/1710189939_0.png" alt="Options Call Chart" />
<h3>Biggest Options Spotted:</h3>

<table>
<thead>
<tr>
<th>Symbol</th>
<th>PUT/CALL</th>
<th>Trade Type</th>
<th>Sentiment</th>
<th>Exp. Date</th>
<th>Strike Price</th>
<th>Total Trade Price</th>
<th>Open Interest</th>
<th style="text-align: right;">Volume</th>
</tr>
</thead>
<tbody>
<tr>
<td>HSY</td>
<td>PUT</td>
<td>SWEEP</td>
<td>BEARISH</td>
<td>04/05/24</td>
<td>$200.00</td>
<td>$136.8K</td>
<td>3</td>
<td style="text-align: right;">540</td>
</tr>
<tr>
<td>HSY</td>
<td>PUT</td>
<td>TRADE</td>
<td>NEUTRAL</td>
<td>04/05/24</td>
<td>$200.00</td>
<td>$110.0K</td>
<td>3</td>
<td style="text-align: right;">200</td>
</tr>
<tr>
<td>HSY</td>
<td>CALL</td>
<td>SWEEP</td>
<td>BULLISH</td>
<td>05/17/24</td>
<td>$200.00</td>
<td>$81.7K</td>
<td>1.5K</td>
<td style="text-align: right;">134</td>
</tr>
<tr>
<td>HSY</td>
<td>CALL</td>
<td>TRADE</td>
<td>BEARISH</td>
<td>04/19/24</td>
<td>$210.00</td>
<td>$55.0K</td>
<td>2.2K</td>
<td style="text-align: right;">282</td>
</tr>
<tr>
<td>HSY</td>
<td>PUT</td>
<td>SWEEP</td>
<td>NEUTRAL</td>
<td>04/05/24</td>
<td>$200.00</td>
<td>$54.0K</td>
<td>3</td>
<td style="text-align: right;">300</td>
</tr>
</tbody>
</table>

<h3>About Hershey</h3>
Hershey is a leading confectionery manufacturer in the U.S. (around a $25 billion market), controlling around 45% of the domestic chocolate space (per IRI, as cited by Hershey). Beyond its namesake label, the firm's mix has expanded over the last 85 years and now consists of 100 brands, including Reese's, Kit Kat, Kisses, and Ice Breakers. Hershey's products are sold in about 80 countries, albeit with just a high-single-digit percentage of sales coming from markets outside the U.S., including Brazil, India, and Mexico. The firm has sought inorganic opportunities to extend its reach beyond its core confection business, adding Amplify Snack Brands and its Skinny Pop ready-to-eat popcorn to its mix, Pirate Brands, and Dot's Pretzels over the past few years.
Having examined the options trading patterns of Hershey, our attention now turns directly to the company. This shift allows us to delve into its present market position and performance
<h3>Current Position of Hershey</h3>
<ul>
<li>With a volume of 2,116,601, the price of HSY is up 2.29% at $199.02. </li>
<li>RSI indicators hint that the underlying stock may be approaching overbought.</li>
<li>Next earnings are expected to be released in 45 days.</li>
</ul>
<h3>Expert Opinions on Hershey</h3>
A total of 2 professional analysts have given their take on this stock in the last 30 days, setting an average price target of $196.5.
<ul>
<li>Consistent in their evaluation, an analyst from Barclays keeps a Equal-Weight rating on Hershey with a target price of $210. </li>
<li>Reflecting concerns, an analyst from Morgan Stanley lowers its rating to Underweight with a new price target of $183.</li>
</ul>
Trading options involves greater risks but also offers the potential for higher profits. Savvy traders mitigate these risks through ongoing education, strategic trade adjustments, utilizing various indicators, and staying attuned to market dynamics. Keep up with the latest options trades for Hershey with <a href="https://benzinga.grsm.io/register174">Benzinga Pro</a> for real-time alerts.

Looking At Hershey's Recent Unusual Options Activity

Hershey's (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HSY#NYSE">HSY</a>) short percent of float has fallen 7.21% since its last report. The company recently reported that it has 2.58 million shares sold short, which is 1.93% of all regular shares that are available for trading. Based on its trading volume, it would take traders 1.14 days to cover their short positions on average.
<h3>Why Short Interest Matters</h3>
Short interest is the number of shares that have been sold short but have not yet been covered or closed out. <a href="https://www.benzinga.com/money/how-to-short-a-stock/">Short selling</a> is when a trader sells shares of a company they do not own, with the hope that the price will fall. Traders make money from short selling if the price of the stock falls and they lose if it rises.
Short interest is important to track because it can act as an indicator of market sentiment towards a particular stock. An increase in short interest can signal that investors have become more bearish, while a decrease in short interest can signal they have become more bullish.
See Also: <a href="https://www.benzinga.com/short-interest">List of the most shorted stocks</a>
<h3>Hershey Short Interest Graph (3 Months)</h3>
<img src="https://www.benzinga.com/files/images/story/2024/1709323223_0.png" alt="short_fig" />
As you can see from the chart above the percentage of shares that are sold short for Hershey has declined since its last report. This does not mean that the stock is going to rise in the near-term but traders should be aware that less shares are being shorted.
<h3>Comparing Hershey's Short Interest Against Its Peers</h3>
Peer comparison is a popular technique amongst analysts and investors for gauging how well a company is performing. A company's peer is another company that has similar characteristics to it, such as industry, size, age, and financial structure. You can find a company's peer group by reading its 10-K, proxy filing, or by doing your own similarity analysis.
According to <a href="https://pro.benzinga.com/">Benzinga Pro</a>, Hershey's peer group average for short interest as a percentage of float is 5.11%, which means the company has less short interest than most of its peers.
Did you know that increasing short interest can actually be bullish for a stock? <a href="https://www.benzinga.com/money/how-to-make-money-on-a-short-squeeze/">This post by Benzinga Money explains how you can profit from it.</a>
This article was generated by Benzinga's automated content engine and was reviewed by an editor.

How Is The Market Feeling About Hershey?

After hitting a fresh record high on Monday, cocoa prices have slumped 13% — a sharp fall in just three days. But experts say the market remains in critical short supply, which is why Valentine&#8217;s Day <a href="https://www.benzinga.com/news/large-cap/24/02/37141514/cocoa-annual-inflation-tops-100-pushes-valentines-day-chocolate-pralines-to-unprecedented-costs">chocolates were so expensive</a>. 
Meanwhile, hedge funds continue to <a href="https://www.benzinga.com/markets/equities/24/02/37183247/choccy-horror-show-hedge-funds-pile-in-as-cocoa-soars-to-record-high">build up long positions</a>.
Despite the slump over the past three days, the U.S. cocoa futures price has jumped 43% to $5,999 a tonne since the start of the year. Four days ago it hit a fresh record high of $6,929.
This is particularly hard on companies such as Hershey Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HSY#NYSE">HSY</a>). The company reported earlier this month that it now expects flat earnings for 2024 due to higher raw materials costs.
&#8220;Historic cocoa prices are expected to limit earnings growth this year,&#8221; said Hershey CEO Michele Buck.
Shares in Hershey have fallen 8% to $186.25 since reporting its quarterly earnings and 2024 outlook on February 8.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/29092434/newplot-2024-02-29T132420.319.png" alt="" class="wp-image-234235" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/29092434/newplot-2024-02-29T132420.319.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/29092434/newplot-2024-02-29T132420.319-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
Also Read: <a href="https://www.benzinga.com/markets/equities/24/02/37183247/choccy-horror-show-hedge-funds-pile-in-as-cocoa-soars-to-record-high">Choccy-Horror Show: Hedge Funds Pile In As Cocoa Soars To Record High</a>
But what does this mean to the consumer? Ether you&#8217;ll pay more for your chocolate and candy bars, or pack sizes are smaller. 
&#8220;Chocolate prices are about to rise — and bars and boxes will shrink too,&#8221; <a href="https://twitter.com/JavierBlas/status/1759597009240047995">said</a> Javier Blas, columnist for Bloomberg and ex-FT commodities correspondent on X.
The cocoa crisis has been a long time in the making. Most farmers in West Africa are overwhelmingly poor smallholders who lack the means to reinvest in their farms. Now, left with mainly old trees, farmers face lower yields and plants that are more susceptible to disease.
&#8220;Both factors are at play this year, and the upshot is a brutal gap between supply and demand, with the market heading for a deficit of between 300,000 and 500,000 tonnes. If confirmed, that would be the largest shortfall in 65 years,&#8221; said Blas.
While this doesn&#8217;t necessarily mean there&#8217;ll be a scarcity of candy bars on shelves — there are global warehoused stockpiles of cocoa — these stocks are wearing thin, adding to price pressure.
The International Cocoa Organization <a href="https://www.icco.org/wp-content/uploads/ICCO-Monthly-Cocoa-Market-Report-%E2%80%93-January-2024.pdf">said</a>: &#8220;It would be beneficial if all major players reconsider the structural issues being faced by the cocoa sector — aged trees, diseases, remunerative farm gate prices, climatic challenges, etc.&#8221;
The World Cocoa Foundation <a href="https://worldcocoafoundation.org/news-and-resources/press-release/world-cocoa-foundation-wcf-draws-up-a-new-landscape-for-an-equitable-cocoa-sector">said</a> it was addressing the imbalance between the wages earned by farmers in Cote d&#8217;Ivoire and Ghana, the world&#8217;s two largest cocoa producers, and prices charged to western consumers.
&#8220;Improving farmer income must remain at the forefront of everything that we do,&#8221; said Chris Vincent, president.
<h3 class="wp-block-heading">This Isn&#8217;t A Short-Term Problem</h3>
Better-paid farmers able to finally plant new trees won&#8217;t solve the problem overnight. It can take around five years before new cocoa trees start to produce seed pods.
This adds up to profits for traders and hedge funds who built up a near $9 billion net long position.
Still, there remains rising costs and pressure on margins for chocolate companies such as Hershey in the weeks leading up to Easter.
Shares in rival Mondelez International Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MDLZ#NASDAQ">MDLZ</a>) — owner of Cadbury, Milka and Toblerone chocolate brands — are down 5% this month. Nestle SA (OTC:<a class="ticker" href="https://www.benzinga.com/stock/NSRGF#OTC">NSRGF</a>), owner of Toll Bar, is down 8% in February.
There is no exchange-traded fund to track the price of cocoa directly, but the Consumer Staples Select Sector SPDR (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLP#NYSE">XLP</a>) has been performing reasonably well over the past few months. Since mid-October, it has gained 12.6% to $74.56.
Read Now: <a href="https://www.benzinga.com/markets/equities/24/02/37367334/gasoline-pump-prices-near-1-year-high-is-this-an-inflationary-threat">Gasoline Pump Prices Near 1-Year High: Is This An Inflationary Threat?</a>
Image: Shutterstock

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The biggest squeeze in the cocoa market in more than a decade has pushed prices of the commodity to record highs in recent sessions as hedge funds have piled into <a href="https://www.benzinga.com/markets/commodities">cocoa futures since the start of the year</a>.
This has been great news for the speculative investors and funds at the heart of this trade, but bad news for chocolate consumers and manufacturers, such as Hershey Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HSY#NYSE">HSY</a>).
In speculative positioning across commodity markets in New York and London, traders — including hedge funds — have built up a massive $8.7 billion position, the largest ever in dollar terms, according to data from the Commodity Futures Trading Commission.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/16091423/newplot-89.png" alt="" class="wp-image-219140" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/16091423/newplot-89.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/02/16091423/newplot-89-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
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<h2 class="wp-block-heading">Prices Rise As African Growers Hit</h2>
Cocoa prices were already moving sharply higher in the final quarter of 2023 as poor weather and disease affected harvests in chief growing areas in West Africa, such as Cote d&#8217;Ivoire — the world&#8217;s largest producer — and Ghana.
Between October and the end of December U.S. Cocoa futures had already gained 23%, surpassing the previous record high of $3,826 per tonne, set during the so-called commodity super-cycle of 2011.
Since the beginning of the year, hedge funds, whose equity short bets have underperformed during the recent stock market rally, have wanted a chunk of the cocoa market. 
They have pushed the price further still. Starting the year at $4,196 a tonne, new volume in the market drove the price 43% higher to a record $6,030 last week. The price on Friday stood at $5,503.
<h2 class="wp-block-heading">Hedge Funds Enter For Their Cut</h2>
&#8220;The squeeze appears to have been driven by commercial players, where the gross long position has increased from around 119k lots in February last year to more than 290k lots currently,&#8221; said Warren Patterson, senior commodity strategist at ING.
&#8220;Whether this is an intentional squeeze or not is less clear. If it is, it wouldn&#8217;t be the first time the cocoa market has experienced one,&#8221; he added.
Indeed, the most notorious squeeze on the cocoa market happened in 2002 when London-based hedge fund Armajaro, under the direction of its founder Anthony Ward, cornered 7% of the global cocoa harvest in a move that earned him the nickname &#8220;Chocfinger.&#8221;
Prices don&#8217;t appear to be about to make a significant move lower either. As production levels fell in 2023, the market was already in deficit in the 2021/22 and 2022/23 seasons according to the International Cocoa Organization.
The market is now set for a sizeable third-successive deficit in 2023/24, which would take global stocks to their lowest in a decade.
As for prices: &#8220;They need to go to levels where we start to see significant demand destruction,&#8221; said Patterson.
He added: &#8220;We are already seeing some of that, but clearly not enough to bring the market back into balance and ease tightness concerns.&#8221;
<h2 class="wp-block-heading">Confectioners Feel The Pain</h2>
The biggest impact has been on brands such as Hershey, which last week missed market earnings forecasts as the company <a href="https://www.benzinga.com/news/earnings/24/02/37012481/hersheys-mixed-bag-stable-q4-earnings-amid-slow-sales-growth-and-rising-cocoa-costs">reported rising costs</a>. This prompted a rating and target price downgrade from Morgan Stanley. Hershey&#8217;s shares are flat on the year, but are down 30% since peaking at around $270 last May.
Confectionary rival Mondelez International Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MDLZ#NASDAQ">MDLZ</a>) is down nearly 8% since January 30 when it reported stronger-than-expected results, but its outlook was marred by rising costs.
Shares in Rocky Mountain Chocolate Factory (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/RMCF#NASDAQ">RMCF</a>) are down around 15% since the start of the year.
Now Read: <a href="https://www.benzinga.com/news/earnings/24/02/37012481/hersheys-mixed-bag-stable-q4-earnings-amid-slow-sales-growth-and-rising-cocoa-costs">Hershey&#8217;s Mixed Bag: Stable Q4 Earnings Amid Slow Sales Growth And Rising Cocoa Costs</a>

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<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>
Dividend <a href="https://investorplace.com/stock-types/growth-stocks/">growth stocks</a> are an excellent choice for long-term investors. Mostly, this is due to their potential to generate above-average total returns over a multi-year time frame. There are two reasons for this.



First, stocks with consistently growing dividends typically have earnings that are consistently growing as well. Stocks with steady earnings growth typically appreciate in value in tandem with increases in earnings per share.



Second, the steadily increasing payouts from dividend growth names provide an extra boost to gains. If you reinvest these dividends into additional shares, down the road your initial investment into these types of stocks can ultimately result in a fairly large nest egg.



Besides potentially resulting in a large pool of wealth, this dividend growth portfolio could also throw off considerable cash each year, which could help fund your retirement.



Looking at stocks with a track record of consistent earnings and annual dividend increases, I have identified these seven dividend growth stocks as solid buys at current prices.



<h2>Automatic Data Processing (ADP)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2022/03/adp-1600-300x169.png" alt="In this photo illustration the stock market information of Automatic Data Processing, Inc. displays on a smartphone with the logo of Automatic Data Processing, Inc. ADP stock."><div>Source: IgorGolovniov / Shutterstock</div></div>Automatic Data Processing (NASDAQ:<a href="https://investorplace.com/stock-quotes/adp-stock-quote/">ADP</a>) is a dividend growth stock to own for all seasons. Shares in the payroll and managed HR services company have a sound track record of producing above-average total returns over a multi-decade time frame.



A <a href="https://www.investopedia.com/terms/d/dividend-aristocrat.asp">&ldquo;dividend aristocrat,&rdquo;</a> with 25 consecutive years of dividend growth under its belt, ADP stock has increased its quarterly dividend payouts by an average of 12.36% annually over the past five years. The company&rsquo;s most recent dividend increase, raised the quarterly payout by 12%, <a href="https://seekingalpha.com/symbol/ADP/dividends/history">from $1.25 to $1.40 per share</a>. 



Yes, ADP&rsquo;s forward yield of 2.29% may not seem low at a time of high interest rates. However, earnings forecasts for this recession-resistant company suggest plenty more room for both price appreciation and dividend increases. Sell-side estimates call for ADP&rsquo;s earnings to increase by <a href="https://www.wsj.com/market-data/quotes/ADP">around 10% in 2025</a>, and by another 8.36% in 2026.



<h2>American States Water (AWR)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2021/03/water_3_1600-300x169.jpg" alt="A zoomed in photo of a drop of water hitting a container of water's surface."><div>Source: Sambulov Yevgeniy/ShutterStock.com</div></div>American States Water (NYSE:<a href="https://investorplace.com/stock-quotes/awr-stock-quote/">AWR</a>) isn&rsquo;t a mere dividend aristocrat. Rather, this water utilities holding company is one of the dividend growth stocks holding &ldquo;dividend king&rdquo; status.



&ldquo;Dividend kings&rdquo; are stocks with a more than 50 year track record of dividend growth. AWR stock meets and exceeds this mark. American States Water has increased its dividend 68 years in a row. Over the past five years, payouts have increased by an average of 9.34% annually. AWR&rsquo;s current forward yield is 2.58%.



Although shares have pulled back considerably since early 2023, this sell-off could work in your favor, if you&rsquo;ve yet to enter a position. 



As Seeking Alpha commentator Kody&rsquo;s Dividends has recently argued, <a href="https://seekingalpha.com/article/4682838-american-states-water-buy-americas-most-battle-tested-dividend-king-now">AWR currently trades at a discount relative to its historic valuation</a>. As the commentator also argued, the stock could experience a strong rally when the Federal Reserve begins to cut interest rates.



<h2>Cincinnati Financial (CINF)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2022/03/cinf-cincinnati-financial-1600-300x169.png" alt="The logo for Cincinnati Financial is shown on a cellphone screen."><div>Source: IgorGolovniov / Shutterstock.com</div></div>Cincinnati Financial (NASDAQ:<a href="https://investorplace.com/stock-quotes/cinf-stock-quote/">CINF</a>) is another &ldquo;dividend king,&rdquo; with a dividend growth track record spanning 63 years. Over the past five years, the property and casualty insurer has increased payouts by an average of 7.31% annually.&nbsp;



The most dividend increase for CINF stock came earlier this year, when the company raised its quarterly payout from <a href="https://www.prnewswire.com/news-releases/cincinnati-financial-corporation-increases-regular-quarterly-cash-dividend-302045868.html">75 cents to 81 cents per share</a>. This represented an 8% increase. At current prices, Cincinnati Financial trades for 18.3 times forward earnings. Among insurance stocks in general, I&rsquo;ll admit this may appear a little pricey.



However, CINF&rsquo;s valuation is in line with other well-capitalized property and casualty insurance stocks, like Markel Group (NYSE:<a href="https://investorplace.com/stock-quotes/mkl-stock-quote/">MKL</a>). MKL sports a similar high-teens forward multiple. If you&rsquo;re looking for high-quality dividend growth stock at a reasonable price, Cincinnati Financial is, and likely will continue to be, one of your best choices.



<h2>Home Depot (HD)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2019/08/hd1600b-300x169.jpg" alt="Home Depot (HD) sign backdropped by blue sky"><div>Source: Rob Wilson / Shutterstock.com</div></div>Home Depot (NYSE:<a href="https://investorplace.com/stock-quotes/hd-stock-quote/">HD</a>) is not yet an &ldquo;aristocrat,&rdquo; but the home improvement retailer appears to be aiming to reach this status. HD&rsquo;s quarterly payouts have increased each year for the past 14 years.



Over the past five years, dividend increases have averaged 13.87% annually, yet payout growth is slowing down. The most dividend increase came in at only <a href="https://ir.homedepot.com/~/media/Files/H/HomeDepot-IR/press-release/q4-2023-earning-release.pdf">7.7%</a>. Even so, don&rsquo;t assume this means weak returns from here for HD stock. 



Expanding into verticals like <a href="https://www.wsj.com/business/deals/home-depot-buys-roofing-distributor-in-deal-valued-at-18-billion-including-debt-a12bb6e3">construction supply wholesaling</a>, Home Depot may be able to meet forecasts calling for <a href="https://www.wsj.com/market-data/quotes/HD">7-8% annual earnings growth</a>.



If earnings keep growing at such levels, so too will HD&rsquo;s quarterly dividends and stock price. Couple the prospect of high single-digit price appreciation with HD&rsquo;s forward dividend yield of 2.69%, and it&rsquo;s easy to see how this stock could produce annualized returns of 10% or more.



<h2>Hershey (HSY)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2023/02/hershey-chocolate-plate-hsy-1600-300x169.jpg" alt="Hershey's milk chocolate pieces on a white plate on top of a wooden table"><div>Source: shutterstock.com/VG Foto</div></div>At first, you may question why I think Hershey (NYSE:<a href="https://investorplace.com/stock-quotes/hsy-stock-quote/">HSY</a>) is one of the best dividend growth stocks to buy right now. After all, <a href="https://www.bloomberg.com/news/articles/2024-03-28/nestle-hershey-take-hit-from-surging-cocoa-prices">the massive run-up in cocoa prices</a> has had an outsized impact on the confectionary company&rsquo;s fiscal results.



This headwind has also resulted in a steep declines for HSY stock. However, as Barron&rsquo;s Jacob Sonenshine argued in March, <a href="https://www.barrons.com/articles/buy-hershey-stock-price-pick-2811a470?mod=Searchresults">now may be the time to scoop up this blue-chip stock on the cheap</a>. HSY currently trades for just 20 times earnings. That&rsquo;s well below its typical earnings multiple. 



Much suggests that cocoa prices will normalize this year. The market has already walked back expectations, so Hershey may be in a position to positively surprise with its results in the coming quarters. 



HSY is also likely to continue raising its dividend, as it&rsquo;s done over the past 48 years. Post-selloff, shares sport a nearly 3% forward yield.



<h2>Interpublic Group (IPG)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2020/08/ipg-stock-1-300x169.jpg" alt="A magnifying glass zooms in on the website of the Interpublic Group of Companies (IPG)."><div>Source: Pavel Kapysh / Shutterstock.com</div></div>Interpublic Group (NYSE:<a href="https://investorplace.com/stock-quotes/ipg-stock-quote/">IPG</a>) is one of the &ldquo;big four&rdquo; advertising agencies. The ad business can be a &ldquo;feast or famine&rdquo; type industry, but this titan of Madison Avenue has continued to generate steady earnings, even with the 2022-2023 ad market slowdown.



As a result, Interpublic has kept raising its quarterly dividend. IPG stock, which has a forward yield of 4.35%, now has 11 years of consecutive dividend growth under its belt. The most recent dividend increase came in at <a href="https://www.marketwatch.com/story/ipg-lifts-dividend-launches-320-mln-share-buyback-7ecf9871">6.5%</a>, and was accompanied by a $320 million stock buyback.



Forecasts for future earnings growth <a href="https://www.wsj.com/market-data/quotes/IPG">range widely</a>, but many factors signal a strong chance IPG could produce the earnings growth necessary to fund further dividend increases, not to mention push shares to higher prices. 



The aforementioned buyback will provide a boost to EPS. <a href="https://www.cnbc.com/2024/02/05/digital-ads-show-signs-of-rebound-as-meta-amazon-point-to-growth.html">Favorable digital ad demand trends</a> also bode well for the company.



<h2>McDonald&rsquo;s (MCD)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2022/07/mcd-1600-1-300x169.jpg" alt="McDonald's golden arches"><div>Source: Vytautas Kielaitis / Shutterstock</div></div>If &ldquo;invest in what you know&rdquo; is part of your approach, McDonald&rsquo;s (NYSE:<a href="https://investorplace.com/stock-quotes/mcd-stock-quote/">MCD</a>) is one of the best <a href="https://investorplace.com/stock-types/dividend-stocks/">dividend stocks</a> to buy. The fast food giant is just three years away from reaching &ldquo;dividend aristocrat&rdquo; status.



Payouts have increased by an average of 8.01% annually over the past five years. Currently sporting a forward dividend yield of 2.52%, the most recent dividend increase came in at 10%. MCD stock has been under pressure lately. 



Management has conceded that <a href="https://www.wsj.com/livecoverage/stock-market-today-dow-jones-03-13-2024/card/mcdonald-s-stock-falls-as-company-says-lower-income-consumers-are-pulling-back-XqnNFTb8dF8MmuKN7UZr">a variety of issues are currently affecting near-term fiscal performance</a>.



However, don&rsquo;t assume this means further 10% dividend increases from the &ldquo;Golden Arches&rdquo; are off the table. Forecasts still call for MCD to report high single-digit earnings growth <a href="https://www.wsj.com/market-data/quotes/MCD">in 2025 and 2026</a>. 



Headwinds ranging from inflation to <a href="https://www.cnbc.com/2024/04/05/israel-boycott-mcdonalds-will-buy-all-225-restaurants-from-franchise.html">Middle East boycotts</a> may prove temporary. In turn, leaving room for results over the next two years to exceed current expectations.



On the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com<a href="https://investorplace.com/corporate/investorplace-publishing-guidelines/">Publishing Guidelines</a>.
<div>Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.</div><h3>More From InvestorPlace</h3>
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The post <a href="https://investorplace.com/2024/04/7-dividend-growth-stocks-to-buy-now-q2-edition/">7 Dividend Growth Stocks to Buy Now: Q2 Edition</a> appeared first on <a href="https://investorplace.com">InvestorPlace</a>.

7 Dividend Growth Stocks to Buy Now: Q2 Edition

Cocoa Futures for May delivery closed at $11,288 on April 18, skyrocketing 166% year-to-date and over 291% in the past year. Stocks of confectionar...