Investing.com — Lindt & Spruengli (SIX:) shares rose on Tuesday after Barclays raised its forecasts, reflecting growing optimism about the company’s prospects.

At 4:06 a.m. (08:06 GMT), Lindt & Spruengli shares were up 2.8% at CHF 109,200.

Barclays, which previously gave Lindt an “equal weight” rating, has now raised its rating to “overweight”, signalling a shift towards a more positive outlook for the premium chocolate maker.

In addition to the rating upgrade, Barclays also raised its target price on the stock from CHF 110,000 to CHF 120,000, citing positive developments that should drive future growth.

Barclays analysts believe Lindt & Spruengli is poised to benefit from several factors that will strengthen its position in the global chocolate market.

“We expect cocoa prices to decline further due to improved cocoa harvests in West Africa, which should ease pressure on COGS,” analysts said.

This should support support the company’s margins, which are expected to boost by 20-40 basis points.

Despite the volatility in global markets, Lindt managed to exceed forecasts, achieving organic growth rates of 13% in 2021, 11% in 2022 and 10% in 2023.

This growth, which amounts to a total of 35% over three years, shows that Lindt can succeed even in hard times.

According to Barclays, the company is expected to maintain mighty momentum, especially in North America, where organic growth is forecast to accelerate to 8% to 9% in the second half of 2024.

What sets Lindt apart from many of its competitors is its pricing power in the premium chocolate market.

Barclays notes that Lindt’s ability to raise prices – by 10% in 2023 and a further 6% in 2024 – without significantly impacting volumes is a testament to its brand strength and customer loyalty.

With plans to further boost prices by 11% by 2025, Lindt’s premium gift offering continues to meet growing consumer demand for high-quality, luxury treats.

Lindt operates in a niche chocolate market that is relatively isolated from broader fast-moving consumer goods (FMCG) trends.

While many companies, especially in the US, are struggling with downward pricing pressure, Lindt, thanks to its focus on premium products and mighty relationships with retailers, is able to maintain a more favourable pricing environment.

This energetic is key as it helps Lindt boost margins and grow the category, especially in markets where premiumisation is increasing.

Lindt continues to be a company with infrequent growth potential in the European consumer goods sector, supported by its leading position in the premium chocolate market and mighty brand equity.

As noted by Barclays analysts, Lindt’s focus on innovation, premiumization and strategic market expansion, particularly in North America and emerging markets, positions the company well for sustainable growth.