Hershey's Snacking Innovation Strategy Requires Robust Execution, RBC Says

MT Newswires Live04-01

Hershey's (HSY) strategic plan for snacking makes sense, but volume growth and subsequent multiple expansion will depend on robust execution, RBC Capital Markets said in a Wednesday research report.

Hershey outlined portfolio innovation plans to capture accelerating trends in snacking, and identified premiumization, functional snacking, multisensorial experiences, and customization as segments representing $1.5 billion in incremental sales over five years, analysts wrote.

The company plans to advance this strategy with a 25% hike in R&D investment this year for organic innovations as well as mergers in new categories with an early-mover advantage, according to the brokerage.

Hershey's supply chain modernization centers on resilience, network agility, and technology-enabled productivity, the firm said. It also continues to maintain an optimal level of network utilization, according to the note.

The brokerage reiterated its sector perform rating on the stock and price target of $212 per share.

Price: 203.89, Change: -4.00, Percent Change: -1.92

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