USFD Put Buyers Hedge Ahead of Aug. 6 Earnings

Options traders are piling into puts on USFD even as short sellers retreat. The divergence sets up an interesting pre-earnings picture for US Foods Holding Corp.

Put-Call Ratio Spikes to Two-Week High

The put-call ratio hit 1.38 on July 28. That is 2.14 standard deviations above the 20-day average of 0.98. The jump stands out because it arrived abruptly — the PCR sat below 0.86 for most of the prior two weeks before surging on a single session.

The timing is pointed. Earnings land on August 6. The last two prints were rough: the stock fell 8.3% on the day after Q4 results in February, then dropped another 3.3% after the May report. Options traders appear to be positioning for a repeat.

Short Sellers Are Heading the Other Way

While put buyers hedge, short sellers are covering. Short interest fell 13.3% over the past week to 4.8% of free float, with shares short down to around 10.6 million. That is a meaningful unwind from the ~12.4 million shares short seen as recently as July 23.

The borrow market backs the retreat. Availability sits at 923% — more than nine shares available to lend for every one currently borrowed. That is a loose lending environment with ample room for anyone still wanting to short. Cost to borrow rose 52% over the week to 0.67%, but in absolute terms that remains minimal.

The ORTEX short score has also eased, dropping from 46.4 on July 14 to 42.4 by July 27, consistent with the reduction in short positioning.

Analysts Turning More Constructive

The analyst backdrop has shifted since the May selloff. Morgan Stanley raised its price target from $94 to $103 on July 16, maintaining Equal-Weight. TD Cowen initiated coverage at Buy with a $116 target on July 7. Both moves came after the stock had already rallied off its post-earnings lows.

The consensus target of $104.50 sits just above the current price of $101.47. That leaves limited upside to the mean estimate — which may partly explain why options hedging has picked up even as the broader sentiment has improved.

Wellington Management added 7.3 million shares as of June 30, making it the top holder at 10.4% of shares. T. Rowe Price added 5.4 million shares in the same period. The institutional flow is constructive, but neither firm has a reputation for short-term trading — their additions don't resolve the near-term earnings question.

What to Watch

The August 6 print is the fulcrum. PCR at 1.38 with a 2.1-sigma z-score reflects real hedging demand. Whether that demand proves prescient depends on whether USFD can break its two-quarter streak of post-earnings declines.

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Data summary

• SI % FF: 4.8%, down 13.3% week-on-week
• PCR: 1.38, z-score +2.14 vs 20-day mean of 0.98
• Availability: 923% (loose)
• Cost to borrow: 0.67%, up 52% on the week
• Next earnings: Aug. 6, 2026
• Stock +7.1% over past week, +2.2% on July 28