Credit Suisse raised its rating on Hershey Co. to “outperform” from “neutral."

NEW YORK — Credit Suisse on Jan. 5 raised its rating on Hershey Co. to “outperform” from “neutral” and raised the company’s target price to $117 per share from $106.

Robert Moskow, research analyst with Credit Suisse

“After more than two years of missing expectations due to disappointing results and after rejecting a take-out offer from Mondelez, Hershey’s management is under a fair degree of pressure this year to prove to the market that it can achieve above-peer returns as an independent company,” Robert Moskow, research analyst with Credit Suisse, wrote in the Jan. 5 report.

Mr. Moskow said the credit agency believes Hershey is set up to accomplish its goals based on four key factors:

• a strong finish to 2016 behind significant flexibility in guidance and strong seasonal confectionery sales in the United States.

• more room to “right-size” the overhead costs of the business to adjust to a more realistic outlook for growth.

• a sharp downturn in cocoa commodity costs that bodes well for 2018.

• above-peer sales growth driven by a longer Easter selling season and more product innovation in the United States.

Michele Buck has been named president and c.e.o. of Hershey, effective March 1.

“The company’s investor day on March 1 should provide a positive catalyst because it will give the new c.e.o. Michele Buck an opportunity to provide more clarity behind the company's plans for a rebound,” Mr. Moskow said.

He noted that Hershey has plenty of room for more cost reductions and advertising efficiencies.

“After taking a longer time than its food peers to adjust to the slowing growth environment, management is now operating with a much more aggressive approach toward its cost structure separating the ‘nice-to-haves’ from the ‘need-to-haves,’” he said.

Hershey’s Cookie Layer Crunch bars debuted late last year.

Mr. Moskow also said he believes Hershey’s strong lineup of new product innovation will be able to drive improvements in the confectionery category. Specifically, he mentioned Hershey’s Cookie Layer Crunch bars that debuted late last year, as well as expected new products from Mars, Nestle and Mondelez.