Sugar Rush Souring: Analyst Downgrades Hershey As 2024 Competition Turns Bitter
Portfolio Pulse from Lekha Gupta
RBC Capital Markets analyst Nik Modi downgraded The Hershey Co (HSY) to Sector Perform from Outperform with a lowered price target of $213 from $239, citing an expected competitive landscape in 2024 with increased marketing and innovation from rivals like Mars and Ferraro/Ferrera. Hershey's shares have been under pressure due to the underperformance of the packaged food space and share erosion. Modi also cut revenue and EPS estimates for FY23 and FY24, reflecting challenges in regaining volume growth and market share amidst rising sugar/cocoa costs and macroeconomic factors.
November 21, 2023 | 7:00 pm
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Hershey downgraded by RBC Capital Markets to Sector Perform with a reduced price target of $213. The downgrade is due to expected increased competition and macroeconomic challenges affecting volume growth and market share.
The downgrade by a prominent analyst due to anticipated increased competition and macroeconomic challenges is likely to negatively impact investor sentiment in the short term. The reduction in revenue and EPS estimates further supports the potential for a negative impact on HSY's stock price.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100