Hershey Analyst Raises Forecast, 'Stock Tempting As A Chocolate Bar, But Risks Remain,' After Q1 Results

Zinger Key Points
  • Hershey’s medium- and long-term targets are at risk, given the recent volume trends and inflation.
  • The stock could continue trading at the low end of its past ranges.

Hershey Co HSY on Friday reported better-than-expected earnings for its first quarter.

The stock is "as tempting as a chocolate bar," but some risks remain, according to Wells Fargo.

The Hershey Analyst: Chris Carey maintained an Equal Weight rating on Hershey, while raising the price target from $200 to $205.

The Hershey Thesis: The multiples for the new target price are still at the low end of the stock's 12-year average, Carey said in the note.

Check out other analyst stock ratings.

"Growth has slowed of late, HSY’s medium- and long-term targets are at risk amid recent volume trends and inflation," the analyst wrote. "Unless inflation eases, HSY may be left with a decision to price more and risk volumes, or lower SG&A to protect profit," he added.

The stock is likely to trade at the low end of its historical range, until there is more balance in its model," Carey further wrote.

He raised his earnings estimates for fiscal 2024 from $9.58 to $9.59 following the release of quarterly results.

HSY Price Action: Shares of Hershey had declined by 1.60% to $194.75 at the time of publication on Monday.

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