By Dhirendra Tripathi
Investing.com – Hershey (NYSE:HSY) shares rose 1.6% in trading Thursday, buoyed with a buy rating from Goldman Sachs.
Goldman (NYSE:GS) analyst Jason English upgraded Hershey to buy and raised the target by $10, to $181. The new price forecast is about 12% higher than the stock’s current price.
According to English, the performance in 2020 was not a one-off and the pandemic’s impact was “only a modest positive."
He believes 2020 was the start of outsized growth that should last three years as the confection industry leverages its pricing power to expand profitability at a time when input costs are not daunting.
“Mars appears to be leading the charge, presumably as it prioritizes pet and veterinarian verticals for growth. We expect Hershey to follow over time, continuing the long-standing industry practice of unified price moves,” the analyst wrote in the note.
Hershey’s consolidated net sales in 2020 rose 2% year-on-year to $8.14 billion. Net income was $1.27 billion, or $6.11 per share, an increase of 11.9%.
For 2021, the company expects performance to be in line with its long-term growth algorithm of 2% to 4% net sales growth and 6% to 8% earnings per share growth.