Hostess Brands Inc. was initiated at outperform with a $22 target price at Credit Suisse based on the consumer desire for indulgent snacks that bucks the health and wellness trend. “We believe investors who pigeonhole Hostess as structurally disadvantaged owing to health and wellness trends are not looking closely enough,” wrote analysts led by Robert Moskow. Analysts say data shows that consumers are snacking more and they’re frequently looking for sweet snacks. “Our conclusion is that event consumers leading healthy lives will frequently consume Hostess products because they view it as a reward,” Credit Suisse said. Analysts also think Hostess is undergoing a transformation that will result in a more “consumer-centric” company, with research investments that make marketing more effective and product launches, like Baby Bundts, successful. Hostess stock has rallied nearly 25% for the year to date while the S&P 500 index has gained 19% for the period.
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