BUZZ-Jefferies cautious on chocolate makers, downgrades Mondelez to 'hold'

Brokerage Jefferies sees the global cocoa shortage and price rises persisting, says recovery of West African production is "the critical component" in supply revival

Also sees surging cocoa futures harming profits of chocolate makers including Mondelez International MDLZ.O and Hershey HSY.N

Downgrades to MDLZ to "hold" from "buy", cuts PT to $62 from $75; says profits to remain "capped" for the next few years on cocoa costs, impacting the company's growth

Brokerage sees relatively higher risk for HSY, as it is more dependent on cocoa, and notes reduced room to increase prices further to offset the possible sustained increase in costs; cuts PT to $134 from $150

MDLZ and HSY are set to report Q4 results on Feb. 4 and Feb. 6, respectively

In 2024, MDLZ and HSY fell ~17% and 9%, respectively

(Reporting by Neil J Kanatt in Bengaluru)

((Neil.JKanatt@thomsonreuters.com;))