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Hershey Media Report 7/21/16
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A 'new sense of urgency' at Hershey
Jul 21, 2016 | Food Business News
By Eric Schroeder
While it believes a takeover by Mondelez International, Inc. is unlikely, Credit Suisse does think drama surrounding the bid will spur “a new sense of urgency” at the Hershey Co. As a result, the equity research firm has raised its 12-month target price for Hershey to $110 per share, up from $91 previously. -
Hershey Co Receives a Hold from Credit Suisse
Jul 21, 2016 | Analyst Ratings
By George Macdonald
According to The Fly, credit Suisse analyst Robert Moskow reiterated a Hold rating on Hershey Co (NYSE: HSY) yesterday and set a price target of $110. The company’s shares opened today at $109.39. Moskow observed, “We are raising our 12-month target price to $110 per share, and raising our forward estimates for Hershey. While we believe Mondelez is unlikely to successfully acquire Hershey, we believe that the drama of this take-out bid will spur a new sense of urgency at the Hershey Company to boost shareholder value and improve fundamental performance. One could argue that the Hershey Trust’s 81% control of the stock obviates the need for a defense plan from Hershey management. But our view is that Hershey management will feel sufficient pressure from shareholders and its board to provide a palatable alternative to selling the business outright.” -
Hershey Trust works to resolve issues with PA Attorney General
Jul 21, 2016 | Seeking Alpha
By Clark Schultz
The latest developments with the Hershey Trust increase the chances of Mondelez International (MDLZ -0.1%) upping its offer down the road or a new bidder such as Nestle (OTCPK:NSRGY) stepping in, observes CTFN.
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A 'new sense of urgency' at Hershey
Jul 21, 2016 | Food Business News
By Eric Schroeder
NEW YORK — While it believes a takeover by Mondelez International, Inc. is unlikely, Credit Suisse does think drama surrounding the bid will spur “a new sense of urgency” at the Hershey Co. As a result, the equity research firm has raised its 12-month target price for Hershey to $110 per share, up from $91 previously.
Mondelez, East Hanover, N.J., in late June submitted an offer to acquire Hershey, Pa.-based Hershey for $107 per share, or about $23 billion.
“We believe that the drama of this take-out bid will spur a new sense of urgency at the Hershey Co. to boost shareholder value and improve fundamental performance,” Robert Moskow, research analyst with Credit Suisse, wrote in a July 20 report. “One could argue that the Hershey Trust’s 81% control of the stock obviates the need for a defense plan from Hershey management. But our view is that Hershey management will feel sufficient pressure from shareholders and its board to provide a palatable alternative to selling the business outright.”
Mr. Moskow said Hershey’s management has more options at its disposal than many investors may realize, including the ability to cull back its investment spending in emerging markets, initiate more stringent trade promotion guidelines, institute stricter zero-based budgeting processes, or use the Allan Candy acquisition as a catalyst to restructure the supply chain.
“Steps such as these won’t do much to reinvigorate top-line growth, but they would give more visibility to margin expansion and e.p.s. (earnings-per-share) growth,” he said. “In our experience management teams can sometimes leverage take-out speculation to further their case internally for more stringent measures to implement change. Hershey’s overhead expenses are over 300 b.p.s. higher than its food peer group as a percentage of sales.”
Mr. Moskow said Credit Suisse has taken the consensus view that Mondelez will raise its bid for Hershey to something closer to $120 per share, a price that would put more pressure on the Hershey Trust to approve of a sale. He also said Credit Suisse believes that the Pennsylvania attorney general’s investigation into the Trust will lead to further resignations of its board members. The potential for resignations may serve as a catalyst for Hershey to bring in outsiders with no ties to Pennsylvania, which may increase the probability of Mondelez striking a deal for the company, Mr. Moskow said. But with the power to block a sale still in the hands of the attorney general’s office, he said Credit Suisse still assigns a low probability to Mondelez achieving its objective.
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Hershey Co Receives a Hold from Credit Suisse
Jul 21, 2016 | Analyst Ratings
By George Macdonald
According to The Fly, credit Suisse analyst Robert Moskow reiterated a Hold rating on Hershey Co (NYSE: HSY) yesterday and set a price target of $110. The company’s shares opened today at $109.39.
Moskow observed, “We are raising our 12-month target price to $110 per share, and raising our forward estimates for Hershey. While we believe Mondelez is unlikely to successfully acquire Hershey, we believe that the drama of this take-out bid will spur a new sense of urgency at the Hershey Company to boost shareholder value and improve fundamental performance. One could argue that the Hershey Trust’s 81% control of the stock obviates the need for a defense plan from Hershey management. But our view is that Hershey management will feel sufficient pressure from shareholders and its board to provide a palatable alternative to selling the business outright.”
According to TipRanks.com, Moskow is a 4-star analyst with an average return of 3.9% and a 60.3% success rate. Moskow covers the Consumer Goods sector, focusing on stocks such as Archer Daniels Midland, Mondelez International, and Amplify Snack Brands.
Currently, the analyst consensus on Hershey Co is Hold and the average price target is $97.50, representing a -10.9% downside.
In a report issued on July 5, Argus Research also downgraded the stock to Hold.
Hershey Co`s market cap is currently $22.76B and has a P/E ratio of 48.00. The company has a book value ratio of 27.3795%.
Based on the recent corporate insider activity of 87 insiders, corporate insider sentiment is neutral on the stock. Most recently, in August 2015, James Nevels, a a Director at HSY sold 4,689 shares for a total of $429,090.
The Hershey Co. produces chocolate and sugar confectionery products. It operates in the geographic regions North America and International & Others. The North America segment is responsible for our chocolate and sugar confectionery market position in the United States and Canada. This includes developing and growing our business in chocolate, sugar confectionery, refreshment, snack, pantry and food service product lines. The International & Other segment includes all other countries where it manufacture, import, market, sell or distribute chocolate, sugar confectionery and other products. The company principal product groups include chocolate and confectionery products, gum and mint refreshment products, and pantry items such as baking ingredients, toppings and beverages. Its brands include Hershey’s, Reese’s, and Kisses. The company was founded by Milton S. Hershey in 1894 and is headquartered in Hershey, PA.
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Hershey Trust works to resolve issues with PA Attorney General
Jul 21, 2016 | Seeking Alpha
By Clark Schultz
The latest developments with the Hershey Trust increase the chances of Mondelez International (MDLZ -0.1%) upping its offer down the road or a new bidder such as Nestle (OTCPK:NSRGY) stepping in, observes CTFN.
The Hershey Trust is working to settle charges from the state attorney general's office and there are signs that deal talks can progress if a Pennsylvania jobs commitment is made.
Hershey trade at $109.14 at last check. Last month, the company rejected an offer at $107 from Mondelez.
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