Why this matters: Three distinct signals are now pulling in the same direction on MCK. Put demand is rising, short interest has climbed back from its post-earnings low, and the borrow market is sending a contradictory message. That divergence is the story.
The put-call ratio hit 0.617 on August 17 — a z-score of 2.48 above the 20-day mean of 0.533. That is the highest PCR reading since mid-July. The move has been persistent, not a one-day spike. The ratio stood at 0.501 on August 3. It has climbed steadily since.
This matters because it represents a genuine change in tone. The August 8 note described a call-heavy setup that vindicated the bull case into earnings. That configuration has now reversed. Options traders are buying puts on a stock that is still up roughly 2% over the past month.
Short interest has climbed approximately 12% over the past week to 2.97% of free float. That reverses the post-earnings covering trend. From the early August trough of around 3.24 million shares, the figure has moved back toward 3.66 million.
Yet the borrow market is not corroborating the short rebuild. Cost to borrow collapsed 68% in one week to just 0.16% — the lowest level in at least two months. Availability stands at over 9,196% of current short interest. There are roughly 92 shares available to borrow for every one already lent out.
That combination — rising shorts alongside falling CTB and extremely loose availability — suggests the new short positions are being established cheaply and without friction. This is not a crowded, squeezable setup. Bears are adding exposure at minimal cost.
The post-earnings analyst response was broadly positive. UBS raised its target to $1,080. Evercore ISI lifted to $1,000. TD Cowen raised to $1,006. Wells Fargo, the lone equal-weight hold, raised to $933 from $812. The consensus target of $991 implies roughly 15% upside from the current price of $859.92.
That gap between analyst targets and current price partly explains why the short thesis is a low-conviction, low-cost hedge rather than a conviction bear position. Insiders offer no contrarian comfort — the only recent trades on record are sells, including two CEO transactions in June and July totaling over $13 million in proceeds.
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