LEVI heads into its Q2 2026 earnings report — due after the close today — with short sellers actively retreating even as options traders load up on downside protection.
The most striking development in the lending market is how quickly bears have pulled back. Short interest has fallen nearly 24% over the past week to 6.7% of free float, the sharpest weekly decline in recent months. That unwind has been accompanied by a dramatic loosening in borrow availability — now running at over 1,000%, meaning roughly ten shares are available for every one currently borrowed. Cost to borrow has also eased, dropping more than 15% on the week to around 0.40% annualised. The borrow market, in short, is as uncrowded as it has been all year. The ORTEX short score has tracked that retreat, falling from around 52 two weeks ago to 44.9 — a move that places the stock in the lower half of the short-pressure universe.
Options tell a different story. Put demand has jumped sharply on the final session before earnings, with the put/call ratio hitting 1.31 — roughly 2.3 standard deviations above its 20-day average of 1.22. That is the most defensively skewed reading in months for a stock that already tends to carry elevated put interest. Shorts are leaving, but options traders are hedging. The two signals are not contradictory — short covering is often a sign of risk reduction, while put buying can reflect the same caution in a different instrument — but together they describe a market tilting cautious rather than confident into the number.
The analyst debate reflects a genuine split on where the story goes from here. Bulls point to denim's continuing fashion tailwind, direct-to-consumer momentum, and management's execution on margin expansion — with UBS carrying a $34 target and Needham holding at $28. Citigroup moved to the day before earnings, lifting its target modestly from $23 to $25 while keeping a Neutral rating — a signal that even the sideline camp sees the stock less at risk than before. The consensus mean sits at $27.27, roughly 11% above Friday's close of $24.54. Bears flag macro fragility and restructuring execution risk, with a noted downside scenario around $14. The earnings history adds a further wrinkle: LEVI posted a one-day gain of nearly 11% after its April strategic update, but fell 3.7% the following day after its most recent scheduled quarterly print, before sliding a further 2.5% over the subsequent week.
Against its closest peers, LEVI has outperformed notably on the week — up 3.5% — while AS, CPRI, PVH, and COLM all fell between 2.6% and 7.2%. Only LULU, up 5.2%, matched that relative strength. That divergence suggests some positioning ahead of today's print rather than a broad sector bid.
The report will test whether the direct-to-consumer and women's category momentum that bulls are pricing in has translated into hard margin improvement — and whether that improvement is durable enough to justify a stock that, after a 6.5% gain over the past month, is now trading within striking distance of a consensus target that has barely moved.
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