New Hershey Price Target as Consumer Stocks Benefit From Economic Slowdown

Is there any sector hotter than consumer staples right now?

The move away from tech stocks and crypto accelerated on Thursday, as consumer stocks continued to benefit from sector rotation.

We recommended several names in the consumer sector just two weeks ago. One of those names, Colgate-Palmolive (CL) , has roared to a gain of nearly 11% in that short stretch of time.

The price action in Colgate-Palmolive mirrors that of the State Street Consumer Staples SPDR (XLP) , a bellwether for the sector. The consumer ETF traded at an all-time high on Thursday, and has gained over 12% over the past month. 

XLP is on the verge of a so-called golden cross (circled), as its rising 50-day moving average (blue) is about to rise above its rising 200-day moving average (red). This crossover is considered a bullish momentum signal.

Charting Hershey’s Sweet Spot

We’re adding another name in the consumer sector, The Hershey Company (HSY) .

The Pennsylvania-based provider of Kit Kat bars, Hershey’s Kisses and other confectionery treats is in the sweet spot for further gains. On Thursday, the stock broke out of an 18-month rounded bottom pattern (shaded yellow) to trade at a multi-year high. 

Based on the breakout and the depth of this pattern, our target price for Hershey is $260.

Key Ingredient Likely to Get Cheaper

Cocoa is one of the most important raw materials for Hershey products. Supply disruptions and tariff concerns drove prices higher in 2025, but cocoa is now comfortably trending lower within a bear channel (diagonal lines).

Solid Earnings and Guidance for Hershey

Hershey reported earnings of $1.71 per share in the fourth quarter, well above estimates of $1.40. Revenues were also stronger than expected, beating estimates by about 3.7%.

Hershey also boosted guidance for the upcoming year. The company expects earnings of $8.20 to $8.52 for the full fiscal year, well above prior Wall Street estimates of $7.08. Revenues should climb to between $12.2 billion and $12.3 billion, up from the earlier estimate of $12 billion.

Bottom Line

While we’re happy to move capital away from tech and into the consumer products sector, there is one caveat: When consumer stocks are performing well, it could be a sign that the economy is softening.

In theory, there are certain products, like toothpaste and detergent, that consumers will continue to purchase regardless of the state of the economy. When the companies that manufacture these products begin to outperform the broader market, as they are now, it could be taken as a warning sign for a potential slowdown. . 

At the time of publication, Ponsi was long HSY and CL.