The Hershey Outlook - Mixed Signals Amid Volatility

Market Snapshot

Headline Takeaway: Despite strong fundamentals, The Hershey (HSY) faces a weak technical outlook and mixed analyst sentiment, suggesting caution for investors. The stock has seen a recent price rise of 0.69%, but technical indicators are bearish and bearish signals outweigh bullish ones.

News Highlights

Recent news in the food and delivery sectors may indirectly affect HSY. DoorDash CEO Tony Xu's consolidation moves, including the $3.9 billion acquisition of Deliveroo, show increased competition in the delivery space. Additionally, regulatory changes in food labeling in India and Israel's food plan for Gaza highlight shifting consumer and governmental attitudes toward food safety and distribution, potentially impacting Hershey’s international operations.

Analyst Views & Fundamentals

Analyst views on HSY are split, with a simple average rating of 2.50 and a performance-weighted rating of 3.08. This suggests a generally neutral outlook. The rating consistency is low, with recent analyst ratings including "Neutral" and "Sell."

• Key Fundamental Factors:
  • ROA (Return on Assets): 0.46% (model score: 8.36)
  • CFOA (Cash Flow from Operating Activities): 0.82% (model score: 8.36)
  • EV/EBIT: 91.88 (model score: 1.92)
  • NPM (Net Profit Margin): 2.40% (model score: 1.14)

These fundamentals show mixed signals. While the ROA and CFOA are strong, the EV/EBIT and NPM indicate some strain. Technical indicators are bearish, which could suggest a short-term divergence from the positive fundamentals. Analysts appear to be cautious, especially given recent bearish chart patterns.

Money-Flow Trends

Big money is showing some caution, with the overall fund-flow score of 7.81 (a "good" rating). Here’s a breakdown:

• Large Inflows: 50.02% of large investors are buying in.
• Small Inflows: 51.02% of small investors are also showing interest.
• Block Inflows: However, large block investors (48.24%) are trending negatively.

This suggests that while individual and small institutional investors are optimistic, large institutional money is cautious. The mixed inflow patterns indicate uncertainty in the market, with no clear consensus on HSY's direction.

Key Technical Signals

Technical indicators are currently bearish. Our internal diagnostic score for technical strength is 3.53, indicating weak technical health. Bearish signals dominate the chart patterns over the past 5 days, with only two bearish signals compared to zero bullish ones.

• WR Overbought: Score 6.01 – internal strength suggests a neutral rise
• MACD Golden Cross: Score 1.87 – neutral bias but historically weak
• Bullish Engulfing: Score 2.72 – some positive momentum but not strong

Recent patterns include:

• 2025-09-08: Bullish Engulfing
• 2025-09-02: MACD Golden Cross

While some patterns show possible short-term upside, the overall technical momentum is weak. Internal diagnostic scores highlight that the market is in a volatile state, and there is no clear trend.

Conclusion

Investors should consider waiting for a clearer trend or a pullback before committing to HSY. Despite strong fundamentals, the current technical indicators suggest avoiding the stock in the short term. Analysts are divided, and while some bullish signals have appeared, the overall trend remains bearish. Monitor the next earnings report and any regulatory developments in the food and delivery sectors, as they could provide a turning point.