Trade War 2.0: Canada Auto Tariffs Hit 50% and What It Means for Your Wallet

**SPEAKER_1** (0:01)
This is InvestTalk from KPP Financial, helping investors make sense of the markets one day at a time. Here's your host, Luke Guerrero.

**Luke Guerrero** (0:17)
Good afternoon, fellow investors, and welcome to the Friday, August 28th, 2026 edition of InvestTalk. I'm your host, Luke Guerrero, and I'll be with you over this next hour as we talk about what went down in the market today, bring you the stories that matter, and try and help you make one more step towards achieving your financial goals. Now, one of the most important things we do is we answer your finance and investment questions. So before we talk about the market, before we run down our show topics, well, let's tackle this caller question now.

**SPEAKER_3** (0:52)
Good morning InvestTalks. Today, I'm calling about Hershey, Tigger Symbol HSY.
It's currently about 1.8 percent of my portfolio, and I'm currently adding slowly to reduce my cost basis. I know they face challenges with the price of cocoa and sugar, but please let me know what you think about the risk to a reward ratio. Thank you. I will listen to the podcast.

**Luke Guerrero** (1:13)
Hershey, Tigger HSY, The Hershey Company is a name we actually hold in one of our portfolios that is a bit more income-focused because they do have a solid dividend that they pay year in and year out. It's actually grown from about 1.7 percent yield to about 3.2 percent yield over the past couple of years and they do a good job returning capital to shareholders. Now, this company, if you don't already know, it's that iconic chocolate and snack manufacturer. So they have the Hershey bars, Reese's, Kiss's, KitKat bars, all those delicious things that I try not to eat anymore. But that being said, some people are eating. Revenue was up 7.5 percent year over year. Their most recent report in July, Q2 2026, had net sales up 6.6 percent, which beat estimates. They had net income at 457.7 million. That was up a lot, hundreds of percent year over year, off a pretty easy prior year comparison because they had a bit of a rough year last year.
And most importantly, we talk about this all the time, we had margin expansion. Because if you're continuing to make money and you don't do it at scale, to the point where you can drive costs down relative to the revenue you bring in, it's not gonna do much for you. So they had gross margins expand 350 bips on pricing, which was solid, though it did land a bit below the 400-bit target that they did set at the beginning of last year. Now recently, in terms of stock performance, it's kind of been flat, right? We had a bad downward move in, looks like March was trading at 224, momentum kind of died. It's been flat for about a month or so. Over the past two months, down about 9.13%, but over the past 52 weeks, pretty much no movement, right? Down 0.52%.
Now, looking at the chart, I mean, it looks rough. I'm not gonna tell you it doesn't. There are some good things on its side here, right? They are legitimately delivering an earnings recovery. They have four straight quarters now of earnings beats. They have meaningful margin expansion, and we're starting to finally see cocoa deflation working in its favor.
And with that, it sits at 52 week lows.
I mean, it's trading near the bottom end of its valuation range. It's pretty cheap compared to where it's been for quite some time. So if you think that in the long term, in the next couple of years, at $179 with a median price target around $200, $205, that as we move in through 2026 into 2027, that this pricing power we're starting to see kind of coupled with volume stability gives you a reasonable opportunity, this value entry like we do, then certainly we think this is a solid company to invest in. But obviously a bit of short term headwinds and we've seen that play out over the past year or so. And at 1.8%, certainly not too big for any individual name in your portfolio. That is Hershey, Tigger HSY. Thanks for the call. Well, we had a pretty good show for you yesterday. We looked into a really important story I would say that is fundamental for your understanding of where you want to allocate. So we talked about the dollar weakness, why it's weakening and how this multi-month low means some pretty important things for your purchasing power. We also answered a listener question on Grab Holdings. That was an interesting one that I still need to dive into more. If you happen to miss yesterday's episode, you want to hear the answer to that question and many more, I encourage you to listen to that podcast. Remember, the best way to never miss an episode of Invest Talk is to subscribe wherever you get your podcasts. Now, on to today, where we will be talking about Trade War 2.0.