Hershey (HSY) could beat Q2 earnings expectations based on innovation, performance and data trends, RBC Capital Markets said in a research report Monday.

Channel checks suggest the company is performing well from a market share standpoint. Its decision to "lag" competitors on instant consumables pricing is yielding dividends in terms of volume, according to the note.

Hershey is also gaining traction in non-traditional retailers, while the confection segment has benefited from its status as low-cost indulgence, analysts wrote.

Hershey's bottom-line guidance could be adjusted to reflect costs related to tariffs on cocoa. The company's projected tariff impact of nearly $100 million a quarter in H2 could translate to an additional 5 percentage point headwind to quarterly EPS, but upcoming product price increases in September could partially offset this impact, according to the note.

The brokerage reiterated its sector perform rating on the stock and price target of $175 per share.

Price: 185.02, Change: -2.11, Percent Change: -1.12