Hershey is seen having limited upside due to confectionary headwinds
Spencer Platt/Getty Images News
Mizuho Securities warned on limited upside for Hershey Company (NYSE:HSY) due to the potential that the confectionary industry returns back to its pre-pandemic trends.
Analyst John Baumgartner said Hershey’s (HSY) Q3 results confirmed softening retail takeaway, and thinks the Pennsylvania-based company may need to make pricing adjustments despite lingering cost inflation.
“Following 3 years of elevated consumption during COVID, confectionary may be resuming a longer term history of per capita declines,” wroted Baumgartner.
The view from Mizuho is that a defensive rotation to consumer staples and the recent drop with consensus estimates may limit the downside on Hershey (HSY), but a Neutral rating is warranted due to the reduced elasticity and economization upside. The firm cut its price target to $180 from $195.
Shares of Hershey (HSY) edged up 0.35% in premarket trading to $187.97.
