A sweet deal
US confectionery maker Hershey has announced a tie-up with rival Ferrero to share resources in stocking and distribution of their products earlier yesterday.
The aim behind this alliance is two-fold : increasing productivity by streamlining operations and reducing their carbon footprint. The effects of this move on the workforce at these two companies is to be seen.
The confectionery space does well during economic recessions - people turn to candy for comfort as reported by Christine Haughney in the New York Times.
Hershey has benefited from this trend. Investors.com has reported that Hershey will post “solid Q3 results”.
However, Forbes has reported that -
…despite HSY’s impressive performance on the charts, most of the Street remains sour on the stock. According to Zacks, only four out of 13 analysts consider the equity worthy of a “buy” or better rating, leaving the door wide open for potential upgrades to fuel future gains. In the same vein, Thomson Reuters pegs the consensus 12-month price target on the stock at a measly $61.42 — just a stone’s throw from HSY’s current share price.
The alliance between Hershey and Ferrero might be a precursor to further joint ventures between these two companies.
