Online shift could hurt Hershey’s sales
Credit Suisse downgraded Hershey (HSY) stock to “underperform” from “neutral” and lowered the target price to $80 from $90. Credit Suisse analyst Robert Moskow thinks that retailers’ rapid shift towards the online platform could hurt Hershey’s top-line growth. Due to the demand for online grocery services, consumers might cut back on buying chocolates impulsively while waiting in line at stores. Recently, Susquehanna reduced its target price on Hershey from $103 to $97.
Following the downgrade, Hershey stock fell 2.3% and closed at $91.22 on June 13.
Hershey’s problem might seem unique, but the packaged food industry has been weak in the past few years. Consumers have shifted towards healthy snacking habits. Price competition among retailers continues to hurt these companies’ sales and profitability. Input cost inflation impacts the margins.
Ratings and target price summary
Among 20 analysts that provided recommendations on Hershey stock, 55.0% suggested a “hold,” 30.0% maintained a “sell,” and 15.0% provided a “buy.” On average, analysts have a target price of $95.63 on Hershey stock, which signifies an upside potential of 4.8% based on its closing price on June 13.