HF Sinclair heads into its July 28 earnings report with a peculiar split: short sellers are quietly adding to positions while options traders are becoming notably more optimistic, creating a genuine tension in the market's read on this battered refiner.
The most striking shift this week is in options. Sentiment has turned more bullish than it has been in some time — the put/call ratio dropped to 0.78, more than two standard deviations below its 20-day average of 0.84. That's the most call-heavy positioning seen over the past month, suggesting traders are reaching for upside rather than hedging against further losses. The move is all the more interesting given DINO's 28% year-to-date decline: options buyers appear to be fading the bearish narrative rather than extending it.
Short interest, however, tells a more cautious story. Bears have rebuilt their position aggressively over the past month — short interest at 4.7% of the free float has climbed 37% in 30 days, adding nearly 2.4 million shares short. The weekly pace has accelerated too, with shorts up 6% over the past five sessions alone. The borrow market remains wide open, which means this position can grow further without friction: availability runs at a remarkable 4,374% — more than 176 million shares available to lend versus fewer than 9 million currently borrowed — and the cost to borrow at just 0.47% imposes no financial deterrent. Availability has tightened sharply this week, falling 36% from last week's level of around 6,800%, but it remains in territory that would be described as extremely loose. The short score has ticked up to 40.1 from 38.5 two weeks ago, consistent with this gradual rebuild in bearish conviction.
The Street is divided but leaning cautiously constructive. Morgan Stanley raised its target to $78 on June 12, maintaining its Overweight. That sits above the consensus mean price target of $76, against a current price of $68.29 — implying roughly 12% upside. Most other recent moves have been upward revisions too, with UBS, TD Cowen, and Barclays all lifting targets after Q1. The lone negative note came from Mizuho in late May, which downgraded to Neutral from Outperform even while lifting its target to $79. The bull case rests on accelerating returns from earlier maintenance cycles and a steady midstream segment. The bear case centres on governance: the CEO's leave of absence and the audit committee investigation into disclosure practices have put a structural discount on the stock that fundamental improvement alone may struggle to close. EPS momentum ranks in the 89th percentile on a 30-day basis — so the numbers are improving — but the eps surprise factor scores at zero, and forward earnings growth sits in just the 15th percentile, signalling the Street doesn't yet see sustained acceleration ahead. Valuation is genuinely cheap at 7.8x trailing earnings and 4.7x EV/EBITDA, with the price-to-book ratio just above 1x.
The insider picture adds an important subplot. REH Advisors, a major board-affiliated holder, sold nearly 1.5 million shares at $68.72 in mid-May — a $100 million block that trimmed its stake to around 6.2% of shares outstanding. The same day, incoming Chairman, President and CEO Franklin Myers bought $1 million worth of stock in the open market at $69.11, a clear signal from new leadership. The net 90-day insider position remains positive at roughly 1.5 million shares bought versus sold, almost entirely because of that Myers purchase — so the message from the top is constructive, even as a legacy board holder reduced exposure.
Among close peers, the week has been broadly positive for refining. PBF Energy and Delek Group each rallied more than 15%, while Valero added nearly 10%. MPC and PSX gained more modestly at 4.6% and 3.3% respectively. DINO's 5.9% weekly gain looks reasonable against this backdrop — a mid-pack performance that neither stands out as catch-up buying nor as underperformance. With Q2 earnings due July 28, the tension between options bulls reaching for upside, shorts rebuilding into strength, and a governance overhang that hasn't fully cleared makes the weeks ahead worth watching closely.
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