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How Hershey Is Sharpening Morgan Stanley's Sweet Tooth

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Valentines Day is around the corner and Hershey Co (NYSE: HSY) has been slowly pushing higher since mid-August 2014.

The fundamental story remains strong on a relative basis against its peers.

Morgan Stanley analyst Matthew Grainger remains Equal-weight on Hersey and expects the company’s EDITDA valuation (less than 1.0x) to “offer flexibility to consider accretive M&A” alongside the possibility of share repurchases.

Grainger defended Hersey’s balance sheet strength by citing the “incremental dairy deflation” during the past quarter, and increased his 2015 EPS estimate from $4.42 to $4.45 despite FX headwinds.

Four things Morgan Stanley says to watch for are:

  1. Progress of MarkTen national rollout
  2. Potential options for monetization of SABMiller stake
  3. Cost and pricing optionality surrounding quota buyout expiration
  4. 2015 outlook and guidance

Hersey shares traded down 0.5 percent mid-way through the morning session to $109.20.

Latest Ratings for HSY

Feb 2017Societe GeneraleUpgradesSellHold
Feb 2017Argus ResearchUpgradesHoldBuy
Feb 2017Deutsche BankInitiates Coverage OnHold

View More Analyst Ratings for HSY
View the Latest Analyst Ratings

Posted-In: Analyst Color Analyst Ratings


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