Shares of Hershey Co HSY climbed in premarket trading on Monday.
Bernstein reported a significant improvement in the candy company’s market share and volume trends in recent months.
Analyst’s Upgrade: Alexia Howard upgraded Hershey from Market Perform to Outperform, and raised the price target from $220 to $235.
Check out other analyst stock ratings.
Rationale Behind the Upgrade: Howard noted that Hershey’s trends have improved since the launch of Reese’s caramels. She outlined three reasons for the upgrade:
- Continued robust top-line growth due to increased cocoa spot prices and sugar-driven price hikes.
- Potential for good gross margins in 2024 based on pricing versus the timing of cocoa hedges.
- Stock trading meaningfully below its typical valuation over the past five years.
Howard asserted, “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 driving sales growth while other parts of the portfolio and potential acquisitions support volume growth.”
HSY Price Action: Hershey’s shares 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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