Sweet Positive Start
Shares of Hershey Co HSY kicked off the week with a positive upward swing in premarket trading on Monday.
Increase in Market Share and Volume Trends
Bernstein has highlighted a significant improvement in the candy company’s market share and volume trends in recent months.
Thumbs Up from the Analyst
The Hershey Analyst: Alexia Howard has upgraded Hershey’s rating from Market Perform to Outperform, while raising the price target from $220 to $235.
Check out other analyst stock ratings.
Rave Over Reese’s Caramels
The Hershey Thesis: Howard’s upgrade note hails the improvement in the company’s trends since the launch of Reese’s caramels.
Howard mentioned three other reasons for the upgrade:
- Robust top line growth continues with cocoa spot prices up around 80% over the past year and sugar-driven price hikes. The company is likely to have “ample ammunition to push through additional pricing this year to strengthen the top line relative to other U.S. food peers,” she wrote.
- Hershey could record good gross margins in 2024 “based on pricing vs. the timing of cocoa hedges.”
- Hershey’s stock is currently trading meaningfully below its typical valuation over the past five years.
“We further believe that although GLP-1 concerns will be more pronounced in chocolate than in meal-based food categories, Hershey has the pricing power and innovation capabilities to continue to drive sales growth in the category, while other parts of the portfolio (and potentially further acquisitions) are likely to support volume growth,” Howard further stated.
HSY Price Action: Shares of Hershey rose by 1.94% to $193.90 in the premarket session on Monday.
Now Read: Hershey’s Options Frenzy – What You Need to Know
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