UL Solutions heads into its August 4 earnings print with the short build that defined July still largely intact, options markets remaining heavily put-skewed, and a stock that has moved further but not resolved the tension.
Short interest has stayed elevated after nearly doubling through June and early July, now sitting at 7.5% of the free float — roughly 4.7 million shares — and edging another 1.3% higher on the week. That is a meaningful position. The borrow market, however, continues to offer no sign of squeeze pressure. Availability is ample at around 498%, meaning there are roughly five shares available to lend for every one currently borrowed, and the cost to borrow is negligible at 0.57%. Short sellers are not being forced out. The position looks deliberate rather than trapped.
Options positioning remains the other leg of the defensive story, though it has eased somewhat from its July peak. The put/call ratio is running at 2.52 — well above its 20-day average of 1.89, but down from 2.82 at the height of the mid-July skew. That still points to pronounced demand for downside protection. The stock itself has traded erratically: down 10% over the past month, up 7% on the week, and closing at $91.64. The recovery has not persuaded short sellers to unwind.
The bull and bear debate pivots on familiar themes. UBS upgraded to Buy in mid-July, maintaining its $110 target — a move that is recent enough to be current and signals at least one bellwether firm sees value after the month's drawdown. Wells Fargo holds an Overweight with a $120 target. Against that, JPMorgan and Citigroup remain at Neutral, and the bear case centres on regulatory risk, international compliance exposure, and the pressure on a China-heavy revenue mix (roughly 24% of sales) as geopolitical conditions evolve. The forward earnings picture is constructive — the 12-month EPS estimate has been rising, ranking in the 91st percentile — but valuation is not cheap, with a PE near 37x and an EV/EBITDA around 20.6x. On those multiples, execution has to be clean.
One feature worth noting is the CEO's selling activity. Jennifer Scanlon sold approximately 12,700 shares across five tranches on July 1, collecting roughly $1.24 million at prices between $97 and $102 — well above where the stock now trades. That alone is not directional, but it adds a layer of context the market has not ignored. The August 4 print is therefore less a question about whether UL Solutions is a sound business and more a test of whether current margins, China volumes, and the pace of certifications demand justify the premium the market attached before the summer pullback.
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