The Hershey Outlook - Weak Technicals But Strong Fundamentals Draw a Mixed Picture

Market Snapshot

Headline Takeaway: Hershey's fundamentals are robust but its technicals are weak, suggesting investors should be cautious. The stock has recently risen by 2.34%, yet bearish signals dominate the technical landscape.

News Highlights

1. DoorDash's Expansion in Food Delivery

DoorDash's acquisition of Deliveroo and SevenRooms highlights growing consolidation in the food delivery sector. While this doesn't directly impact Hershey, it signals broader industry shifts that may influence consumer spending habits.

2. Regulatory Developments in Food Labeling

India's Supreme Court is pushing for stricter food labeling regulations, potentially affecting global food brands. Hershey, with its international footprint, could face higher compliance costs or market adjustments in regions with evolving food standards.

3. Food Inflation and Policy Shifts

Food inflation remains a concern in several markets, and ongoing tariff negotiations may influence supply chains and consumer spending. These dynamics could indirectly affect Hershey's sales in key international regions.

Analyst Views & Fundamentals

Two analysts from Piper Sandler and JP Morgan have issued recent ratings for The Hershey. The simple average rating is 2.50, while the performance-weighted rating is 2.79. Ratings are consistent, with one "Sell" and one "Neutral" recommendation in the last 20 days. However, the recent price trend (a 2.34% rise) contrasts with the neutral-to-bearish analyst sentiment.

Key fundamental factor values and their model scores:

• EV/EBIT: 91.88 (model score: 0.53)
• Net profit margin: 5.29% (model score: 0.09)
• Return on total assets: 4.24% (model score: 0.16)
• Net cash flow from operating activities (YoY): -43.12% (model score: -0.16)
• Cash flow from operating activities (CFOA): 0.82 (model score: 0.33)
• Annualized return on total assets: 8.47% (model score: 0.16)

Hershey’s fundamentals are strong overall, with a fundamental score of 9.01 (internal diagnostic score 0–10). The firm shows solid operating cash flow and a high annualized return on assets, though its net income growth has declined sharply compared to revenue.

Money-Flow Trends

Big money is cautious on Hershey, with block inflow ratios at 48.20% and large/extra-large inflow ratios below 50%, pointing to a negative overall trend in institutional money flows. Retail investors, however, are showing positive sentiment, with small inflow ratios at 50.77%, indicating optimism among individual traders. The fund flow score of 7.79 (internal diagnostic score 0–10) suggests mixed signals between retail and institutional flows.

Key Technical Signals

Technically, The Hershey is in a weak position, with 3 bearish indicators and 0 bullish ones. The technical score is 2.82 (internal diagnostic score 0–10), reflecting poor momentum and a high risk of further declines in the near term.

Recent key indicators:

• Williams %R Overbought: Score of 3.87 (internal diagnostic score 0–10) – signals overbought conditions with a 55.32% win rate historically.
• Bullish Engulfing: Score of 2.72 – a bullish candlestick pattern, but with a 47.06% win rate and negative average returns.
• MACD Golden Cross: Score of 1.87 – mixed signal with a 40% win rate and -0.58% average return.

Over the past 5 days, the strongest signals have come from Williams %R and Bullish Engulfing on 2025-08-26, followed by a mix of signals on 2025-09-02 and 2025-09-08. This pattern suggests inconsistent momentum.

Conclusion

Hershey’s fundamentals remain strong, but its weak technical profile and mixed institutional flow caution against short-term bullish bets. With bearish signals dominating and a technical score of 2.82 (internal diagnostic score 0–10), the best approach is to avoid aggressive entry and watch for a potential pullback or clearer trend confirmation in the coming weeks. Investors should also keep an eye on earnings and broader industry shifts in food delivery and regulation.