HSY reported first-quarter earnings of $1.63 per share
Shares of Hershey Co (NYSE:HSY) are down 5.3% to trade at $138 this morning, sitting out the broad market rally. The candy king is lower after reporting first-quarter earnings of $1.63 per share on revenue of $2.04 billion -- both lower than Wall Street's respective estimates of $1.71 per share and $2.08 billion. Also dragging HSY is a huge sales decline in China, where sales fell 46.7% in the reported quarter. As far as a coronavirus update, manufacturing plants will remain open, and a Hershey exec stated that "we continue to operate our supply chain with limited disruption."
Prior to today, Hershey stock had added 13.5% on the charts since a year low of $109.88 on March 23. However, the shares faced overhead pressure and were eventually turned away by their 200-day moving average, an area that coincides with HSY's 12-month consensus price target of $148.06.
Short sellers started to jump ship earlier this month. In the last two reporting periods, short interest fell 19.2% and now accounts for 2.52 million shares, or a slim 1.7% of the stock's available float. It would take nearly two days to buy back all these bearish bets, at HSY's average pace of trading.
It's worth noting that Hershey options can be had at a relative bargain at the moment. The equity's Schaeffer's Volatility Index (SVI) of 35% stands higher than just 29% of all other readings from the past year, implying that near-term options traders are pricing in relatively low volatility expectations.