Piper Jaffray is concerned with HSY's valuation after its strong run in 2019
Hershey Co (NYSE:HSY) shares are trading down 0.5% this morning at $137.15, after Piper Jaffray downgraded the stock to "underweight" from "neutral" and set a $125 price target, saying the company's valuation is too high compared to its peers. This comes after HSY hit an all-time high of $139.34 earlier this month, with the equity sporting a nearly 29% year-to-date lead. In fact, this would only be just the third time the shares closed below the 10-day moving average since March.
This marks the first rating that's worse than a "hold" on the security, which is what 10 of the 11 covering brokerages had on the shares coming into today. There was also one lone firm with a "strong buy" recommendation. What's more, the average 12-month price target is down at $122.93.
Meanwhile, near-term options traders are unusually call-skewed on Hershey, according to the Schaeffer's put/call open interest ratio (SOIR) of 0.71. This reading ranks in the 5th annual percentile, showing that call open interest outweighs put open interest among contracts expiring within three months by a wider-than-usual margin at the moment. And this comes at a time when HSY options have been oddly popular overall, with open interest right now of 61,442 contracts ranking as a 52-week high.