Piper Sandler analyst Michael S. Lavery reiterated the Overweight rating on The Hershey Company (NYSE: HSY), lowering the price target to $240 from $285.
Lavery notes that Cocoa costs are up ~50% in 3Q23TD, at record levels. HSY hedges 3-24 months out, so there is little near-term impact, and it can generally be an opportunistic buyer, given its coverage, the analyst thinks.
These price levels are likely unsustainable and seem driven more by speculation than fundamentals.
Hence, the analyst expects cocoa pricing to roll over in the coming months but will monitor how it progresses.
Sugar is up ~38% in 3Q23TD, driven ...