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How Analysts Reacted to Hershey’s Q2 Results



Multiple analysts raised target price on HSY stock

Several analysts raised their target price on Hershey (HSY) stock following the company’s second-quarter release. Credit Suisse raised the target price to $85 from $80, and Deutsche Bank raised it to $101 from $98. Morgan Stanley increased the target price on Hershey stock to $98 from $93 per share.

Hershey reported stronger-than-expected sales and earnings during the second quarter. Incremental sales from the Amplify acquisition and improved volumes drove its top-line growth rate. Hershey’s price restructuring efforts are a positive factor for the company, especially given the increased cost pressures.

Hershey’s bottom line is projected to mark double-digit growth in 2018, led by improved sales and a substantially lower effective tax rate. The company’s management raised the quarterly dividend by 10.0% and announced a $500.0 million stock buyback program.

However, trade promotional spending, increased interest costs, and higher packaging and supply chain costs are expected to hurt the company’s results.

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Ratings and target price

Of the 20 analysts providing recommendations on Hershey stock, 12 analysts maintained a “hold” rating and six analysts gave it a “sell” rating. Two analysts recommended a “buy.” Analysts have a consensus target price of $94.95 per share on Hershey stock, which implies a downside of 4.7% based on its closing price of $99.66 on July 26.

Most of the analysts covering Mondelēz (MDLZ) stock maintained a “buy” rating on the stock.


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