Hershey vs. Mondelez: Which Stock Wins Chocolate Season?

Key Points

• Cocoa inflation pressures chocolate makers, but Hershey is proving its pricing power.
• Hershey’s diversification into gummies and salty snacks shields it from cocoa volatility.
• Mondelez may offer value upside, but Hershey’s momentum and analyst upgrades stand out.

It’s no surprise that The Hershey Company NYSE: HSY and Mondelez International NASDAQ: MDLZ are lagging the broader market in 2025. However, it’s worth noting that Hershey stock has outperformed Mondelez nearly 2:1 this year. This comes despite rising cocoa prices that impact both companies.

Cocoa prices may be beyond the companies’ control, but how each manages rising costs sets them apart. With Halloween and the holidays driving peak candy demand, the strength of their non-chocolate portfolios could determine which stock is the sweeter buy.

Why Are Cocoa Prices Soaring?

Stock charts often tell a story, and for Hershey and Mondelez, the story is cocoa. Both stocks hit all-time highs in 2023 but have since fallen sharply as cocoa prices surged.

Unfavorable weather in West Africa, which produces about 70% of the world’s cocoa, has tightened supply, squeezing margins and eroding market share for major confectioners. At the same time, GLP-1 weight-loss drugs are dampening consumer demand for sweets.

Put together, it’s no surprise investors are treating candy stocks as a bitter bet.

Hershey Grows Through Diversification

The twin impacts of higher commodity prices and shrinking waistlines explained why HSY stock was one of the worst-performing stocks in 2024. It didn’t help that the company had a change in the C-suite as Kirk Tanner replaced Michele Buck in 2023. While this change was part of a predetermined succession plan (and Buck has not left the company), it was a prove-it moment for investors.

So far, Tanner has delivered. Hershey has successfully passed along a price increase of around 26% on popular labels like Reese’s, Kit-Kat, and PayDay candy bars. However, the company’s strategy goes deeper than that.

Much like the acquisition of Frito-Lay, which has made PepsiCo Inc. NASDAQ: PEP more than a soft drink company, Hershey has been expanding beyond chocolate for some time. That's why it launched Shaq-A-Licious XL Gummies with Shaquille O’Neal in 2024, which sold more than 11 million units, making it the top candy debut of the year.

Plus, it leaned into and expanded its portfolio of salty snacks, particularly with the SkinnyPop brand. Hershey effectively shielded against higher cocoa prices and private label momentum.

Mondelez Relies on Cost Controls

Mondelez has a portfolio beyond chocolate. However, its earnings report did not show the strong gains made by Hershey in these categories. Much of the company’s margin preservation was through cost-cutting measures.

That helped it beat quarterly estimates by about 7% but trails Hershey’s 23% earnings surprise. Earnings growth comparisons also favor Hershey: while its EPS slipped 3% year-over-year, Mondelez posted a steeper 15% drop.

The difference underscores Hershey’s ability to pass along price hikes to consumers, something Mondelez still needs to prove this quarter.

A Case of the Known or the Unknown

Based on conventional metrics and technical indicators, MDLZ stock appears to have more upside. Both stocks trade at premiums to their historical price-to-earnings (P/E) multiples and the average for consumer staples stocks.

However, never forget that earnings growth is the key driver of stock prices. As detailed above, Hershey has been able to pass its higher cocoa prices on to consumers. That’s a feat that Mondelez will try to do this quarter.

If it can, MDLZ stock has more upside, according to the consensus price target of analysts.

However, Hershey has received two significantly bullish upgrades in the last month. BNP Paribas Exane lifted its rating on HSY stock from Neutral to Outperform. More impressively, on Sept. 16, Goldman Sachs upgraded the stock from a Sell to a Buy and raised its price target to $220 from $170.

That would be a gain of about 15%, higher than the consensus 13% growth expected in MDLZ stock.