HSY ends the week with a notable shift in tone: the short-seller rebuild that defined most of May has gone into reverse, and a fresh analyst upgrade landed this morning just as the stock tests the $191 level.
Short interest has pulled back sharply from the intraweek high. It peaked near 10.8 million shares on May 15 — the highest point of the month — before falling roughly 10.5% over the following week to sit at 6.5% of free float. That still leaves shorts up about 9% versus a month ago, so the broader rebuild flagged in the previous note is not erased. It has, however, lost momentum. The borrow market remains wide open — availability runs at over 1,100% of current short interest, meaning there are more than eleven shares available to borrow for every one already shorted. Cost to borrow has also eased, dropping to 0.38% from around 0.51% earlier in the week. There is no squeeze pressure, and no friction in the lending market for either new entrants or those exiting.
Options positioning sits mildly more defensive than usual. The put/call ratio is 0.92, roughly half a standard deviation above its 20-day average of 0.89 — elevated compared to late April, when the ratio was consistently below 0.75, but nowhere near the 52-week high of 1.39. The drift toward puts appears gradual rather than urgent, consistent with a market that is hedging somewhat but not pressing a strong directional view.
The most significant development this week is the Evercore ISI upgrade. David Palmer moved HSY to Outperform from In-Line this morning, keeping his target at $255. That target is a meaningful 33% above the current price of $191.12, and it stands out in a field that had been moving in the opposite direction. Since May 1, the majority of Street moves were target cuts: UBS, Wells Fargo, JP Morgan, and DA Davidson all trimmed numbers in the days following the Q1 print, while maintaining neutral or hold-equivalent ratings. Morgan Stanley, which holds an Overweight, cut from $247 to $227 in late April. The overall consensus remains a Hold, with fifteen analysts in the neutral camp versus five buyers. The average target across the recent cuts clusters in the $200–$227 range, implying modest upside from current levels on consensus estimates — the Evercore call sits well above that pack.
The bear case centres on what Hershey itself called out: US market concentration, consumer sensitivity to pricing, and structural headwinds from MAHA and GLP-1 trends on snack consumption. Cocoa cost hedges for 2026 may also not offer the same protection as prior years. The bull case rests on brand depth, distribution gains, and a dividend score that ranks in the 97th percentile of the broader universe — the yield and earnings stability arguments remain intact even as growth estimates get trimmed. EPS momentum scores (72 and 71 on both 30- and 90-day measures) and a 71 reading on forward EPS year-on-year increase suggest that while the Street is cautious, the earnings trajectory has not deteriorated sharply.
The Milton Hershey School Trust — which controls 27.7% of shares — continued its steady programme of sales this week, filing transactions across May 21 and May 22 totalling roughly $2.1 million across multiple tranches at prices between $187.70 and $194.60. The significance scores on each trade are low, and the pattern is consistent with a portfolio rebalancing programme rather than a directional statement. Net insider activity over the past 90 days shows a modest positive $10.5 million, but that figure likely reflects different filing windows rather than fresh buying.
The next scheduled catalyst is the Q2 earnings report on July 30. The last two quarterly prints produced asymmetric outcomes: a 3.6% drop after Q4 results on April 30, followed by a 2.4% gain after a separate May 5 event. Whether the Evercore upgrade changes the Street's risk posture into that date — and whether the short-position retreat continues or stalls — is the setup worth watching between now and then.
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