Rating Confirmation
Moody's Ratings today affirmed all ratings of The Hershey Company (NYSE:HSY), maintaining its A1 issuer rating, A1 senior unsecured rating, and Prime‑1 commercial paper rating, and changed the outlook from negative to stable.
Financial Outlook
Moody's projects adjusted EBITDA to increase by 30‑35% in 2026, driven mainly by the carry‑over of pricing actions implemented in 2025, while cocoa costs remain modestly above 2025 levels because of hedging locked in at previously higher prices. Cocoa prices fell from a peak of about $12,500 per tonne in 2024 to roughly $6,000 per tonne by late 2025 and further moderated to approximately $3,000–$4,000 per tonne through May 2026. Hershey’s hedging program means the company will not fully benefit from the lower market prices until 2027, supporting an expected adjusted EBITDA growth of 10‑15% in that year.
Revenue and Volume Drivers
Organic revenue growth in 2026 is expected to be primarily driven by the pricing actions already taken, whereas confectionery volumes remain pressured due to those pricing actions and a cost‑conscious consumer environment. Salty‑snack sales are forecast to grow at a mid‑single‑digit rate, supported by distribution expansion and increased household penetration of brands such as Dot’s and SkinnyPop.
Liquidity Position
As of March 29 2026, Hershey held $877 million in cash and has access to a fully undrawn $1.875 billion revolving credit facility that expires in October 2030. Free cash flow after dividends is projected at $500‑$750 million for 2026 and $750‑$1,000 million for 2027.
Deleveraging Expectation
The rating agency expects Hershey to deleverage to a leverage ratio below 2.0× over the next 12‑18 months, down from the mid‑2× range reported at the end of the period ended March 29 2026.