Eaton Corporation reported Q2 on July 31 and jumped 7.3% in a single session. Now Evercore ISI has upgraded the stock — and the options market is still digesting the move.
Evercore ISI's David Raso upgraded ETN to Outperform from In-Line this morning. His new price target is $502, up from $453. That implies 21% upside from the July 31 close of $415.20. It's the most significant analyst action on the stock since a wave of target raises followed Q1 results in May, when JP Morgan, Citigroup, RBC Capital, and Keybanc all lifted targets. The consensus mean now sits at $455.79, but the Evercore call is well ahead of that pack.
The upgrade lands after one of Eaton's better single-session performances in months. The 7.3% post-earnings jump validated the bear retreat that had been underway for weeks — short interest fell roughly 26% over the past month to just 1.8% of the free float. That level carries no meaningful squeeze signal. It simply confirms that dedicated short sellers had little conviction in fading this print.
What's notable is the put/call ratio hasn't immediately unwound. It sits at 1.29 — a z-score of 2.42 standard deviations above its 20-day mean of 1.08. That's the highest reading in three weeks, and it's elevated even after earnings cleared. One explanation: investors who bought put protection pre-earnings are rolling or holding hedges while they assess whether the post-earnings rally holds. Another: new investors buying calls have not yet swamped the existing put positioning.
The 52-week PCR range runs from 0.27 to 1.52, so current levels are elevated but not extreme.
Cost to borrow jumped to 1.04% on July 31 — up 130% in a week from around 0.45%. This is worth noting as a change of direction, though the absolute level remains low. Borrow availability is extremely loose at 1,639% of short interest, meaning the lending pool is deep relative to what's actually borrowed. The CTB move reflects some renewed demand for borrows post-earnings — perhaps investors initiating fresh short positions at the higher share price — but it is not a sign of any borrow squeeze.
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