Hershey (HSY) Management Meeting Takeaways - Credit Suisse
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Credit Suisse analyst Robert Moskow reiterated an Outperform rating and $194.00 price target on Hershey (NYSE: HSY) after hosting meetings with with Hershey CFO, Steve Voskuil who confirmed that Mars’ unilateral price increases in bagged chocolate at the start of the year narrowed Mars’ price discount to the very low end of their historical norms in relation to Hershey. This provides Hershey with a high degree of optionality to introduce higher pricing on bagged chocolate at the start of 2022.
An investor concern had been conservative guidance which was expanded upon in the meetings. The analyst stated "About 100-200 bps of the deceleration relates to retailers pulling forward orders into 1H and about 100 bps from fewer shipping days in 4Q. Aside from that, management said they just wanted to take a conservative view on how long the “dual benefits” of strong at-home snacking consumption and re-acceleration from increased consumer mobility can last. We believe this sets up well for a positive surprise in 2H sales, especially since our Nielsen data indicates 18% retail sales growth in July compared to July 2019."
Shares of Hershey closed at $181.16 yesterday.
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