LEU Shorts Squeeze Tighter as Borrow Dries Up

Centrus Energy enters the back half of August with the most crowded short book in its recent history — and not a single share left to borrow.

The borrow market tells the starkest part of the story. Availability has fallen to zero: every share in the lending pool is currently lent out, a condition that has persisted, with only brief interruptions, since mid-July. Short interest has climbed to 30.5% of the free float — up 7.7% on the week and 20.7% over the past month — leaving days-to-cover near seven according to the most recent FINRA settlement data. The ORTEX short score has drifted to 76.8, its highest reading in the trailing ten days, ranking in the first percentile of the entire universe on both short score and availability tightness. Bears have piled in aggressively; the lending market simply has no more capacity to accommodate them at these rates. Cost to borrow, notably, has actually eased — down roughly 4% on the week to 1.1% annually — which underscores that the constraint is supply, not price: there is nothing left to lend, and lenders aren't demanding a premium because the pool is already exhausted.

Options positioning has shifted more defensive in recent weeks, though not dramatically so. The put/call ratio is running at 0.71, slightly above its 20-day average of 0.67 and about 1.2 standard deviations from the mean — elevated but well short of the 52-week high of 0.83. The directional skew has been building since late July, when the PCR climbed from a trough around 0.63 to its current level. That gradual drift toward puts, set against a backdrop of exhausted borrow, suggests options traders are hedging rather than speculating outright — a cautious posture rather than a panicked one.

The Street is divided, with the clearest split between valuation-cautious neutrals and growth-optimistic bulls. This week, UBS raised its target to $185 while keeping a Neutral rating. Barclays initiated at Equal-Weight with a $207 target. JP Morgan sits at $180 Neutral after trimming its target from $236 in late July. On the other side, Needham holds a Buy with a $262 target and Evercore maintains Outperform despite cutting to $337 from $390 post-earnings. The consensus mean target is $255, implying roughly 45% upside from the current $175.70 — but bulls and neutrals are sitting in materially different zip codes. The stock is up 12.6% over the past month despite a 7.1% pullback this week. Valuation multiples reflect the growth premium: the trailing P/E is near 52x, EV/EBITDA around 43x, and both have expanded sharply over the past 30 days. EPS momentum scores rank in the bottom quintile of the universe, a drag that partially explains the Neutral cluster's hesitation even as forward earnings growth estimates are exceptional.

The bull case rests on Centrus's $900 million DOE award and its role as the only US-licensed enricher of HALEU, with a $5–7 billion Piketon expansion providing a long runway of contracted revenue growth. The bear case is the flip side: no official capital budget, heavy reliance on TENEX for current LEU supply, and genuine execution risk on a project of that scale. BlackRock added over 1 million shares in the most recent reporting period, now holding 7.8% of shares. State Street and Bank of Nova Scotia also added meaningfully, building positions above 6% each — a sign that institutional conviction on the long side remains intact even as short interest has rebuilt sharply.

Earnings are next due November 6. The most recent print in early August saw the stock drop just under 6% on the day before partially recovering over the following week — a reminder that the volatility potential is real when nearly a third of the float is short and there is no borrow headroom left to absorb a rapid covering move. Whether that pressure builds or dissipates will depend heavily on any news around the Piketon expansion timeline or updates to the DOE relationship between now and the next print.