Credit Suisse Raises Price on Hershey (HSY), Nothing But Good Things To Come
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Price: $184.22 --0%
Rating Summary:
11 Buy, 20 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 6 | Down: 10 | New: 16
Rating Summary:
11 Buy, 20 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 6 | Down: 10 | New: 16
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Credit Suisse is maintaining their Outperform rating on shares of Hershey (NYSE: HSY) following a recent meeting with CEO David West. The firm states that they barely ever hear him sound so bullish about business conditions and as a result is raising their 2011 EPS estimate to $2.90 from $2.84 and is tweaking their 2012 and 2013 to $3.17 and $3.34 from $3.14 and $3.40. They are raising their price target to $58 from $56.
The company reaffirmed that they are growing as fast if not faster in February than they experienced in January where they had retail sales growth of 6.6%. The company also commented that Reese's Minis and Hershey's Drops are tracking at or above expectations and as a result the firm is raising their sales growth estimate to 7% for the quarter and 6% for the year.
Gross margin is expected to be flat and they expect 75 bps of SG&A leverage in 2011. Credit Suisse comments that, "Hershey is now reaping the rewards of the huge investments it made in advertising, consumer research, supply chain, and sales force coverage over the past two years."
Mr. West did mention that the company was talking about a share repurchase program, which they expect to be around $400 million, but notes that it could be as high as $700 million which would boost EPS by 6%.
Credit Suisse reports that, "If the Ivory Coast's export ban continues, Hershey and its competitors will have to lock in their commitments for cocoa beans at higher prices for 2012. The good news is that the Mars and Hershey traditionally do a good job of passing through their higher costs to their customers. With spot prices now 15% higher than a year ago, the chocolate companies would mathematically only need 2% pricing to offset the cost. But bean prices could conceivably go higher from here if the export ban continues."
For more ratings news on Hershey click here and for the rating history of Hershey click here.
Shares of Hershey closed at $53.02 yesterday.
The company reaffirmed that they are growing as fast if not faster in February than they experienced in January where they had retail sales growth of 6.6%. The company also commented that Reese's Minis and Hershey's Drops are tracking at or above expectations and as a result the firm is raising their sales growth estimate to 7% for the quarter and 6% for the year.
Gross margin is expected to be flat and they expect 75 bps of SG&A leverage in 2011. Credit Suisse comments that, "Hershey is now reaping the rewards of the huge investments it made in advertising, consumer research, supply chain, and sales force coverage over the past two years."
Mr. West did mention that the company was talking about a share repurchase program, which they expect to be around $400 million, but notes that it could be as high as $700 million which would boost EPS by 6%.
Credit Suisse reports that, "If the Ivory Coast's export ban continues, Hershey and its competitors will have to lock in their commitments for cocoa beans at higher prices for 2012. The good news is that the Mars and Hershey traditionally do a good job of passing through their higher costs to their customers. With spot prices now 15% higher than a year ago, the chocolate companies would mathematically only need 2% pricing to offset the cost. But bean prices could conceivably go higher from here if the export ban continues."
For more ratings news on Hershey click here and for the rating history of Hershey click here.
Shares of Hershey closed at $53.02 yesterday.
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