Hershey May See Margin Pressure Due To Soaring Cocoa And Sugar Costs: Analyst Cautions
Portfolio Pulse from Nabaparna Bhattacharya
Piper Sandler analyst Michael S. Lavery has reiterated an Overweight rating on The Hershey Company (HSY), but lowered the price target from $285 to $240 due to soaring cocoa and sugar costs. Cocoa costs are up ~50% and sugar is up ~38% in 3Q23TD. Lavery expects cocoa pricing to roll over in the coming months. He also updated margin assumptions for 4Q23 and 2024 to allow for greater input cost pressure. On the positive side, HSY outperformed peers last year during Halloween, helping it secure a greater share of sell-in with retailers for this year.
September 22, 2023 | 7:39 pm
News sentiment analysis
Sort by:
Ascending
NEGATIVE IMPACT
The Hershey Company's stock may face pressure due to soaring cocoa and sugar costs. The company's price target has been lowered from $285 to $240 by Piper Sandler analyst. However, HSY's strong performance last Halloween could help it secure a greater share of sell-in with retailers this year.
The soaring costs of cocoa and sugar, key ingredients for Hershey, are likely to put pressure on the company's margins. This has led to a reduction in the price target by Piper Sandler analyst. However, the company's strong performance during last year's Halloween season could potentially offset some of the negative impact.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100