Jim Cramer on Hershey Company: “It’s Probably Close to a Bottom”

The Hershey Company (NYSE:HSY) is one of the stocks Jim Cramer shed light on. Cramer discussed the company’s struggles over the last couple of years, as he remarked:

“Why has this iconic candy maker become such a heinous stock? The truth is, Hershey’s been struggling for the last two and a half years. Now, I think a lot of that’s largely because of the GLP-1 weight loss drugs that have hammered the entire packaged food industry… However, I gotta, tell you, I think the worst might be behind this one… I can’t say that that’s an unreasonable reaction to the quarter, even as the stock was already down hard going into the earnings, but, and there’s a big, pretty big, but you might want to take the other side of the trade here.

When you look at the quarter, those results were legitimately very good, much better than we’ve gotten used to from Hershey over the past few years. I actually appreciate management’s cautious tone here… They also think that while cocoa prices could remain inflationary, that could moderate as 2026 comes… fully into focus. I agree with that too. Honestly, if you don’t have any position in Hershey and you want to diversify away from the pure tech like so many others are trying to do, yeah, it’s tempting, tempting to put on a small position here with the stock down at the lowest level since early July.

Sure, Hershey still looks expensive, selling at 28 times this year’s earnings estimates, nearly 25 times next year’s. But if I’m right that management’s being deliberately cautious with its forecasting, then there’s a good chance next year’s numbers will come in higher than expected, making the stock a lot cheaper in retrospect after this big fall. So here’s the bottom line: Hershey’s been through a very difficult few weeks coming on the heels of a tough couple of years. Their results have been muddled, including the quarter that was reported yesterday, as the new management team has only just taken over. In fact, they have been very conservative when talking about the future. But I like that. Frankly, I think that, even if the stock hasn’t bottomed yet, it’s probably close to a bottom. Although this one only works if you believe in Kirk Tanner’s leadership. I’m a believer.”

Image Courtesy Pixabay

The Hershey Company (NYSE:HSY) manufactures and sells confectionery, snacks, and pantry products under brands such as Hershey’s, Reese’s, Kit Kat, and SkinnyPop. The company’s products include chocolates, gums, mints, pretzels, and baking ingredients.

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Disclosure: None. This article is originally published at Insider Monkey.