UPDATE: Bernstein Downgrades Hershey (HSY) to Market Perform

(updated to add analyst name, comment)

Bernstein analyst Alexia Howard downgraded Hershey (NYSE: HSY) from Outperform to Market Perform with a price target of $155.00.

The analyst comments "Although we believe that Hershey will continue to enjoy margin improvement and low-single-digit top line growth, we now believe that the benefits of improved input costs and upcoming price increases have largely been recognized by the market: Our thesis was that with the sharp decline in cocoa prices that occurred in late 2016, Hershey would start to see some margin benefit once longer term hedges rolled off. This started to happen in 2H:18 as gross margins began to surprise to the upside after a particularly difficult year with freight cost inflation in 2H:17 and 1H:18. Going forward, we expect that the 10% price increase on instant consumables (~one third of sales), will benefit the company on both the top and bottom line in 2020 and beyond, although we also believe that this is now largely priced into the stock."

For an analyst ratings summary and ratings history on Hershey click here. For more ratings news on Hershey click here.

Shares of Hershey closed at $151.15 yesterday.

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