12:17 PM EDT, 07/30/2024 (MT Newswires) -- Hershey's (HSY) Q2 organic growth could fall short of market expectations amid downside in North America confection, though its salty snacks business is likely to outperform expectations, RBC Capital Markets said in a note e-mailed Tuesday.

The confectionery company is scheduled to report Q2 results Thursday. RBC expects earnings of $1.48 per share, while net sales are projected to fall 7.2% year-over-year to $2.31 billion.

"While scanner data in the [NA Confection] segment trends negative, shipments may be lower given the reversal of 1Q's ERP related build," RBC said in a note to clients. "However, we see salty snacks outperforming expectations with strong pretzel performance, but continued softness in RTE Popcorn."

RBC said it continues to rate the Hershey stock at sector perform, with a $209 price target.

Sentiment on the company is low as an increase and volatility in cocoa futures has resulted in increased short interest and "continued concerns" around its earnings power next year, the brokerage said.

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