Cocoa Crunch, Pricing Woes - Morgan Stanley Flags Hershey's Bitter Aftertaste, Downgrades Stock
Portfolio Pulse from Lekha Gupta
Morgan Stanley analyst Pamela Kaufman downgraded The Hershey Co (NYSE:HSY) to Underweight from Equal-Weight with a reduced price target of $183 from $191, citing concerns over cocoa inflation, pricing environment, and consumer demand. Despite a slight sales increase in Q4 fiscal 2023, Hershey's sales missed consensus, and its 2025 EPS estimate was lowered due to expected input cost inflation and gross margin contraction.
February 12, 2024 | 5:48 pm
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Morgan Stanley downgraded Hershey to Underweight from Equal-Weight and reduced the price target to $183 from $191, due to concerns over cocoa inflation, a tougher pricing environment, and weaker consumer demand.
The downgrade by Morgan Stanley reflects significant concerns about Hershey's future profitability and growth, particularly due to cocoa inflation and consumer demand issues. This negative outlook, especially with the reduced price target, is likely to impact investor sentiment and could lead to a short-term decrease in HSY's stock price.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100