Shares of Hershey Co. (HSY) was dropped to underperform by Jefferies analysts, calling chocolate “amongst the most concerning” segments of the US snack sector in a note Thursday.

The analysts dropped their price target to $163 from $184, nearly 15% below the company’s Wednesday clos๊ing price. The stock edged lower today, closing around $190.

“Elevated prices and a stretched consumer are finally impacting the US snack category,” the analysts said, with chocolate in particular trailing other snacks. Potato chips, pretzels, and cookies have seen growing volume, but chocolate hasn’t kept up as American consumers look for 澳洲幸运5官方开奖结果体彩网:ways to stretch their budgets.

Rising Cocoa Prices Are a Drag

One problem for chocolate is the 澳洲幸运5官方开奖结果体彩网:climbing price of cocoa, which hit all-time highs this year after years o🐽f poor harvests. 🐻The plants generally grow only near the equator, in hot and humid regions, limiting production largely to Africa.

That means “chocolate producers are facing materially higher input costs on the back of a historic inflationary super-cycle,” the analysts said. And "consumers appear increasingly to be choosing more cost-effective snacks.”

Hershey's shares are up about 2% this year, and down over the past 12 months.