Three firms raised price targets on Toll Brothers yesterday. Options traders rotated sharply toward calls. The borrow market went the other way — tightening even as shorts remain absent. The signals are pulling in different directions, and that tension is the story.
Truist, UBS, and Evercore ISI all raised targets on August 20, the day after Q3 earnings. UBS lifted to $195 from $187. Evercore moved to $191 from $185. Truist went to $170 from $165. All three maintained bullish ratings. The consensus mean now stands at $171.27 — 18% above the current price of $145.12. That gap between where analysts see fair value and where the stock trades has widened meaningfully since the earnings-day decline.
Barclays remains the outlier. The firm holds its Underweight rating with a $122 target, a level 16% below where TOL trades today.
The put/call ratio fell to 1.22 on August 20 — the lowest in three weeks and 3.0 standard deviations below its 20-day mean of 1.30. Before earnings, the PCR had climbed to 1.35, a z-score of +1 above the mean. The directional shift is sharp. Options positioning went from defensively elevated ahead of the print to the most call-skewed it has been in at least three weeks, all within 48 hours of results.
This is where the story gets interesting. Short interest has continued its post-July retreat. SI sits at 4.26% of the free float, down roughly 11% over the week and nearly 4% over the past month. Availability remains extraordinarily wide at 8,616% — lendable shares dwarf shares already borrowed by a massive margin. The borrow market is not tight.
Yet cost to borrow jumped 77% over the week to 0.44%. That is still a low absolute level, but the directional move is notable. Previous articles noted CTB dropping toward its 30-day lows as short interest unwound. That dynamic has now reversed. The CTB rise is happening even as SI falls and availability stays loose — a combination that warrants watching, though the absolute level is not alarming.
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