Hershey enters September with a curious disconnect: short sellers rebuilding positions sharply even as the stock drifts only modestly lower, with analysts and bulls broadly sidelined rather than alarmed.
Short interest is the week's sharpest data point. It climbed 22% over the past seven days to 6.4% of free float — a meaningful jump for a blue-chip consumer staples name. The move came almost entirely from a single step-change around August 24, when shares short leapt from roughly 7.8 million to 9.7 million in one session, before easing back slightly to 9.55 million by September 1. The official FINRA settlement reading from August 14 confirmed 10.3 million shares short with 8 days to cover, lending weight to the directional signal. Despite that rebuild in short positioning, the borrow market remains loose. Availability runs at 815% — more than eight shares still lendable for every one currently borrowed — and cost to borrow is a negligible 0.52%, barely a tick above its 30-day range. There is no squeeze pressure here. The short score of 48.9 sits near the middle of the universe, ranking in the 23rd short-score percentile, consistent with a stock that is moderately shorted without being at an extreme.
The Street's posture reinforces the cautious tone rather than amplifying it. Analysts have been trimming targets consistently since July. RBC Capital lowered its target to $206 on August 21, while Barclays has cut twice and Wells Fargo marked its number down to $190. The mean price target sits near $205, implying roughly 17% upside from the current $176 level — but the direction of travel has been down, not up. UBS and JP Morgan each nudged targets fractionally higher after Q2 results but remain firmly Neutral. The one outlier is Evercore ISI, which holds an Outperform but dropped its target from $255 to $225 in late July. No firm has moved the rating itself; the debate is purely about how far the multiple should compress. On valuation, the PE has eased to 19.3x and EV/EBITDA has drifted to 12.6x, both down modestly over 30 days — the market slowly taking air out of what was a more premium staples multiple. The forward EPS revision story is a partial offset: the eps_12m_fwd_yoy_increase factor ranks in the 92nd percentile, meaning analysts see meaningful earnings growth ahead even if they're reluctant to price it in fully today. The dividend score ranks at the 98th percentile.
The bull-versus-bear debate on Hershey is well-worn but still live. Bulls point to roughly 35% US chocolate market share, Reese's and Kit Kat brand dominance, and a forward earnings upgrade cycle that could re-rate the stock if cocoa costs stabilise. Bears flag ongoing market share erosion to Mars, Ferrero, and private label, particularly in non-seasonal chocolate — and question whether premiumisation through brands like Lily's can meaningfully move the needle given Hershey's mainstream identity. The Q2 result on July 30 did not resolve the debate: the stock fell 4.8% the next day and has only partially recovered in the weeks since, closing September 1 at $176, down 6% on the week.
The ownership picture adds a structural wrinkle. The Milton Hershey School Trust, holding 27.6% of shares, has been selling steadily through a 10b5-1 plan — the recent trades show roughly $1.8 million in sales across September 1-2 alone. These are pre-arranged disposals, not discretionary conviction sells, and the Trust's sales have been a known, consistent feature of the stock for years. Still, the mechanical supply drip contributes to the technical ceiling on the stock. Capital International Investors' 13G/A filing from May 14 showed their stake dropping to near zero from a prior 6.1%, a notable exit by a previously significant passive holder. Vanguard Capital Management filed a fresh 13G in April at 7.51%. No 13D activist has filed on the name.
The next catalyst is the November 5 earnings print. Between now and then, the question is whether the short rebuild reflects informed pessimism about the cocoa cost trajectory into Q4 or is simply a tactical position against a stock that peers like GIS, up 3.3% on the week, and SJM, up 4.8%, have outrun. The divergence between Hershey and the broader packaged-food group is worth tracking as the commodity calendar unfolds through autumn.
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