HE has shifted sharply in one week — short sellers are back, options traders have abandoned the bullish positioning that briefly emerged after Q2 earnings, and the stock is down another 1.6% on the week to $11.37.
The previous note flagged an unusual divergence: shorts covering while options turned bullish. Both of those signals have now reversed. Short interest jumped 12.6% on the week to 10.3% of the free float — back above the level that prompted the earlier note and now at its highest reading in the 30-day window, with 17.7 million shares short. The single-session jump on August 25 was particularly sharp: a 10.9% rise in one day. That pace of rebuild is notable. Borrow costs remain low at 0.42%, having eased around 16% on the week, and availability is generous at 483% — meaning supply of shares to borrow is not a constraint on this short rebuild. With the lending market this loose, there is nothing stopping additional short positioning from accumulating further.
The options reversal is equally striking. The put/call ratio spiked to 0.476 on August 25 — the highest reading in at least six weeks and roughly 1.4 standard deviations above its 20-day average of 0.41. Just days ago it sat near 0.34, the most bullish skew in months. The shift is abrupt and directly contradicts the call-heavy positioning that had built in the days following the Q2 print. Options traders have clearly reassessed. The ORTEX short score has also moved, climbing to 63.5, its highest in the 10-day history shown — up from 59.9 on August 14.
The Street offers little counterweight. Analyst coverage is thin, with consensus at hold and a mean price target of $11.92 — barely 5% above the current price. Barclays lowered its target to $12 on August 11 while keeping an Equal-Weight rating, and Jefferies sits at Underperform with an $11.75 target, having cut from $13.75 back in July. Both moves are in the same direction: trimming targets while keeping cautious ratings. The EPS surprise factor score ranks in the 99th percentile — meaning the company has consistently beaten estimates — but the short score rank sits in the 8th percentile, flagging it as one of the more heavily shorted names in the broader universe. EPS momentum over 30 and 90 days ranks in the bottom 15%, suggesting the fundamental trajectory isn't providing much support.
Among peers, US utilities broadly softened on the week — OGE fell 2.4%, AEP dropped 2.8%, and XEL slid 2.5%. HE's 1.6% weekly decline looks less extreme in that context, though the stock's month-long 15.8% drop is far steeper than anything peers have absorbed. The most recent earnings print, on August 7, resulted in a 6.5% single-day decline and a 6.1% five-day loss — suggesting the market continues to respond negatively to results even when they beat estimates. The next earnings event is not until November 6, leaving a long gap in which the positioning story will need to do the explaining.
The number to watch next week is whether the short interest rebuild sustained after the August 25 spike holds — or whether it proves to be a one-session anomaly in an otherwise rangebound positioning story.
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