Salomon Smith Barney upgraded Hershey Foods (HSY) to buy from neutral.
On Tuesday the candy manufacturer reaffirmed it expects 2002 operating earnings per share to meet its 9%-11% growth objective.
Analyst Jaine Mehring says her upgrade is due to a 16% price pullback from a $72 high earlier in the year. She also cited a modest increase in estimates as cost structure improvements were tracking ahead of her expectations.
She raised her $3.10 2002 EPS estimate to $3.13, and upped her $3.35 2003 estimate to $3.40 on better cost structure and efficiencies. Mehring has a $70 target. she notes risks include market instability, competition and cocoa costs.