Hershey (HSY) suffers from rising cocoa prices and is not able to convince investors about its transformation strategy

Since January 2018, cocoa prices have risen more than 30%, and thus, have negatively affected Hershey’s core business: confectionery, and in particular chocolate. Furthermore, Hershey’s ambition to move into the snack business with its $1.6 billion acquisition of popcorn maker Amplify Snack Brands as its latest step to overcome the slow growth of U.S. confectionery sales is not able to spur investors’ confidence.

As a consequence, today UBS slashed its rating to sell with a price target of $90.00. The move to the downside is pretty convincing as it comes on trading volume that is more than six times the 20-day average for this time of day, according to Bloomberg data. Hershey’s stock is now down 11% over the past 52 weeks compared to a 12% gain for S&P 500 .