Tootsie Roll: Still A Treat, Just Not At This Price

Tootsie Roll remains a defensive, family-run confectioner with a clean balance sheet but trades at premium multiples versus peers. Recent quarter saw revenue down 1% and EPS drop 21%, pressured by higher cocoa costs, sales timing shifts, and increased trade promotions. I expect FY 2026 to deliver low single-digit sales growth, modest margin recovery as cocoa prices ease, and stable but modest dividends. Valuation remains stretched at ~$37; I maintain a 'Hold' rating, favoring entry below $30 for a margin of safety.