Deutsche Bank Joins the Bulls as Shorts Retreat from Coherent

Short positioning has unwound sharply, and the borrow market confirms there is no pressure building. Short interest fell roughly 22% across the week to 5.6% of the free float — back to levels last seen in late July, after peaking above 7.5% in mid-August around the earnings event. Availability in the lending pool has loosened dramatically, now running at 1,522% — meaning there are more than 15 shares available to borrow for every one currently lent out, the highest reading in at least six months. Cost to borrow has eased to 0.38%, down 12% on the week and near the floor of its recent range. That combination — falling short interest, ballooning availability, minimal borrow cost — describes a market where the skeptics have largely retreated and short-side pressure has evaporated. The put/call ratio at 1.29 is modestly above its 20-day average of 1.26 but well below the 52-week high of 1.35, suggesting options positioning is cautious without being defensive.

The ORTEX short score has drifted lower all week, reaching 36.4 by Tuesday — down from 40.6 two weeks ago when shorts were most active. That directional move reinforces the covering story. Among close peers, FN fell a sharper 6.8% on the week and JBL dropped 3.1%, suggesting the broader electronic components space was under selling pressure — making Coherent's relatively modest weekly decline look less idiosyncratic and more sector-driven.

One item on the 13D register warrants a note. BCPE Watson (DE) BML, LP filed a Schedule 13D/A in February 2026 — the activist flag on the register is still live, with a previously disclosed stake of around 5.2%. No current holding is reported, and per standard disclosure rules, a filer who drops below 5% may never update again. The activist thread is unresolved, not necessarily active. Institutional flow from the largest passive holders — BlackRock at 8.5% and Vanguard across multiple entities — showed steady buying in the most recently reported quarter, adding incremental support to the ownership base.

Insider activity this week is routine rather than signal-generating. The CTO sold roughly $3.6m across two days under a pre-arranged 10b5-1 plan — scheduled sales, not discretionary conviction moves. The 90-day net insider position is a modest net sale of about $3.6m in value across the same insider, consistent with plan-driven diversification rather than a change in management's fundamental view.

The next earnings event is scheduled for November 6. The two most recent prints produced sharply divergent patterns: the August 14 release saw a one-day gain of 7.3% followed by a five-day reversal of 11.5%, while the prior result was essentially flat on the day before a similar five-day fade. The pattern worth watching is whether Coherent can sustain a post-earnings gain long enough to hold the analysts' revised targets — the Street's upgrades have consistently preceded multi-week pullbacks in the recent cycle. With the stock now 53% below consensus targets and shorts having largely cleared the table, the balance of attention shifts toward whether AI-related order momentum in Q1 FY2027 confirms the bull case Deutsche Bank just endorsed.