RBC Capital analysts reiterated their Sector Perform rating and maintained a $205 price target on Hershey (NYSE:HSY) stock, following recent channel checks that revealed competitor Mars plans to implement a price increase across its entire portfolio in December.
Hershey had previously announced a 12% price increase on about 50% of its portfolio, effective in November, excluding instant consumables. Mars, however, will be raising prices across its entire lineup, including instant consumables, with increases ranging from 10-11% on chocolate, 11-12% on non-chocolate items, 16% on gum, and 10% on mints.
The analysts noted that while this pricing strategy is a near-term positive for Hershey, they remain cautious about the potential for consumers to move away from the chocolate category due to rising prices, which could lead Hershey to spend more on marketing to regain market share in the future.