The Hershey Outlook - Weak Technicals and Mixed Analyst Sentiment

1. Market Snapshot

Takeaway: The Hershey (HSY) is currently showing a price increase of 4.74%, but technical indicators and bearish analyst views suggest caution.

2. News Highlights

Recent news points to increased attention on food delivery and regulation, with DoorDash's acquisition of Deliveroo and developments in Indian food labeling policies. In India, officials are calling for more investment in indigenous food processing machinery to reduce reliance on imports. Meanwhile, in the U.S., regulatory shifts, such as the FDA's planned changes to GRAS (Generally Recognized as Safe) standards for processed foods, are being closely watched. These broader trends could impact consumer behavior and, indirectly, Hershey's market positioning.

3. Analyst Views & Fundamentals

• Average Rating Score: 3.50 (simple mean of analyst ratings).
• Weighted Rating Score: 1.19 (performance-weighted average).
• Rating Consistency: Analysts are divided—Piper Sandler rates the stock as a "Sell" while Goldman Sachs recommends a "Strong Buy."
• Alignment with Price Trend: The stock has risen 4.74% in the recent period, but analyst expectations are mixed, with a generally pessimistic market outlook.

Fundamental Highlights:

• Net Income-to-Revenue Ratio: -1.43% (internal diagnostic score: 8.15)
• ROA (Return on Assets): 0.46% (internal diagnostic score: 8.15)
• Net Assets per Share Growth: -4.37% (internal diagnostic score: 8.15)
• EV/EBIT: 91.88 (internal diagnostic score: 8.15)
• Basic EPS YoY Growth: -70.59% (internal diagnostic score: 8.15)

4. Money-Flow Trends

Money flow is showing a negative overall trend, with large and extra-large investors moving cautiously. However, retail and small investor flows remain positive, indicating some optimism among individual traders. Notably, the block inflow ratio stands at 49.44%, and the fund flow score is 7.86 (a "good" rating). This suggests that while big money is wary, retail investors are still accumulating shares.

5. Key Technical Signals

Technically, HSY is in a weak position with an internal diagnostic score of 2.45, suggesting it's best to avoid for now. The bearish signals are dominant, with 4 out of 5 indicators pointing downward. The most recent patterns include:

• MACD Death Cross: Score: 1.08 (bearish signal, historically leading to negative returns)
• Dividend Payable Date: Score: 1.00 (another bearish trigger, as stocks often dip post-dividend)
• MACD Golden Cross: Score: 1.87 (mildly bullish but countered by stronger bearish factors)

Over the past five days, MACD Death Cross and Dividend Payable Date on September 15 triggered bearish sentiment, while MACD Golden Cross and WR Overbought on September 2 signaled a neutral-to-bullish mood. However, the bearish indicators outweigh the positive ones, confirming a weak momentum.

6. Conclusion

Investors should exercise caution with The Hershey, as technical indicators are bearish, and analyst views are split. While fundamentals remain strong (high internal diagnostic scores), the short-term price trend is being contradicted by bearish signals and pessimistic expectations. A pull-back may offer better entry points for long-term investors. Until the technical indicators improve and analyst sentiment aligns with the price trend, it’s advisable to avoid or watch from the sidelines.