M&T Bank enters the back half of summer with short sellers in retreat and options markets flashing their most bullish signal in months — a combination that reinforces the stock's 6.5% climb over the past month to $252.61.
The clearest signal this week is in options positioning. The put/call ratio has dropped to 0.38, nearly 1.4 standard deviations below its 20-day average of 0.44 and close to the lowest reading of the past year. That represents a sharp reversal from mid-July, when the PCR was running near 0.49. Call volume is now dominating the options tape in a way that has rarely been seen over the past 52 weeks, where the ratio peaked at 1.42. Traders who were hedging into earnings have rotated firmly toward upside exposure.
Short interest reinforces that picture. Bears have been cutting exposure steadily since mid-July — short interest as a percentage of free float has fallen roughly 13% over the week to 3.3%, down from a recent peak of around 4.0% in early July. At the same time, borrow availability has loosened sharply, climbing to 1,392% — meaning there are roughly fourteen shares available in the lending pool for every one currently borrowed. That is the highest availability reading of the past 52 weeks and well above the prior 52-week floor of 600%. Borrow cost ticked up to 0.57% on Tuesday, a 14% weekly rise, but remains trivially cheap in absolute terms. The combination of falling short interest and abundant availability points to an unwind rather than a squeeze — shorts are leaving voluntarily, not being forced out.
The Street is broadly constructive after last week's earnings print. Analyst targets moved almost universally higher following the Q2 release, with the consensus mean price target now at $255.81 against a current price of $252.61 — a thin 1.3% implied upside that suggests the Street views the stock as fairly priced after its recent run. JP Morgan raised its target to $265.50 on Tuesday while holding a Neutral rating. Most other firms followed a similar pattern: Truist lifted its target by $38 to $268, Barclays moved to $267, and DA Davidson went to $266 — all maintaining neutral or hold-equivalent ratings. Only RBC carries an Outperform, with a $255 target that the stock has already nearly reached. Wells Fargo stands apart with an Underweight, though even Mike Mayo raised his target to $224. The bull case centres on net interest margin expansion to 3.71% and 5.9% year-over-year revenue growth. Bears flag weakening consumer lending and a 1.5% sequential dip in net interest income as potential headwinds.
Factor scores reflect the post-earnings improvement. The EPS surprise rank sits at the 85th percentile — M&T has a strong track record of beating estimates — while EPS momentum looks healthy at the 74th percentile over 30 days and 69th over 90 days. The ORTEX short score has eased from 44 in mid-July to 40, a steady drift toward less bearish territory that mirrors the short interest unwind in the data. Price-to-earnings stands near 12.4x and price-to-book at 1.33x, undemanding for a franchise of this quality relative to the broader banking peer group.
Among close peers, MTB outperformed on the week. TFC led the group with a 3.1% weekly gain, while KEY and HBAN were the laggards, down 1.4% and 4.8% respectively. FITB and USB both edged higher but well below MTB's 1.6% weekly gain, suggesting the post-earnings re-rating has given MTB a modest relative edge within the cohort.
The next scheduled earnings event is October 16. Between now and then, the interplay between NIM trajectory, consumer loan weakness, and the broader rate environment will determine whether the current near-consensus price target leaves room for further upgrades or simply marks a pause after a 25% year-to-date run.
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