AERO heads into its Q2 print today with the stock down sharply, the short-selling community retreating, and options traders leaning bullish — a combination that makes the earnings reaction harder to read than usual.
The price action into the report has been rough. Shares closed Monday at $15.30, down 8.5% on the day, 11.7% on the week, and nearly 12% over the past month. That slide is not out of step with the broader airline sector — correlated peers UAL, ALK, and AAL all fell between 7% and 9% on the week — but AERO's move is sharper, amplified by Mexican carrier-specific concerns around fuel costs and currency. Despite the selloff, the borrow market is sending the opposite of a bearish signal: availability is extraordinarily loose, with over 6,400% of short interest represented by shares still available to lend, and the lending cost has eased to roughly 3.8%. Short sellers have actually been covering, with estimated shares short falling 20% in a single session on July 10 and down 34% over the past month. The ORTEX short score has dropped to 39.9 from 44.6 a week ago, reinforcing that the bearish positioning is unwinding rather than building.
Options traders reflect the same lean. The put/call ratio has drifted below its 20-day average, now at 0.26 against a mean of 0.30 — slightly call-heavy, suggesting the options market is not bracing for another leg down despite the recent losses. That said, the 52-week PCR range runs from zero to 1.50, so the current reading sits well within normal bounds and doesn't signal strong conviction either way.
The analyst picture shows a consistent pattern of target cuts but maintained bullish ratings. JP Morgan kept its Overweight rating in June but trimmed its target to $26.50 from $28. Jefferies initiated at Hold with a $20 target in mid-June — the most cautious stance among tracked coverage. Barclays has been cutting targets since March, from $32 down to $25, while staying Overweight. The mean analyst target of $27.10 implies more than 75% upside from the current $15.30 price. That gap is striking, but the direction of travel — repeated target reductions — suggests the Street is chasing the stock lower rather than setting a floor. The bull case centres on post-restructuring margin recovery and Aeromexico's dominant position on US-Mexico routes; bears point to continued EPS momentum deterioration, with the 30-day and 90-day EPS momentum factor scores both sitting in single digits.
Ownership adds an interesting angle. Apollo Global Management holds 21.8% and Delta Air Lines holds 18.7% — two strategic shareholders with no reported changes in recent quarters. Strategic Value Partners added 5.4 million shares in the most recent filing period, a meaningful build by an active credit-oriented fund familiar with the airline's post-bankruptcy capital structure. That kind of buying from restructuring-specialist holders is a different signal than generalist accumulation. The last comparable earnings print, in April, saw the stock fall 5-6% on the day and extend those losses to roughly 6-11% over the following week.
Today's print will test whether Aeromexico's cost structure and revenue per seat are improving fast enough to close the gap between where analysts think the stock belongs and where the market has priced it.
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