JP Morgan Cuts ATO as Bears Build Positions

JP Morgan downgraded ATO to Neutral this morning. The bank slashed its price target to $180 from $198 — still 9% above Wednesday's close of $164.81, but the direction of travel is clear.

The move caps a rough stretch for the gas utility. Analysts at Morgan Stanley and Truist Securities both trimmed targets in August. The consensus now sits at Hold, with a mean target of $186.55. That's a wide gap from current trading, but the parade of cuts suggests little urgency to close it.

Bears Move in Behind the Downgrade

Short sellers have noticed. SI in ATO climbed 21.7% in a single day on Wednesday, reaching 2.78% of free float. Over the past month, borrowed shares are up 29.5%.

At 2.78% of float, the absolute SI level remains modest for a utility name. But the pace of the build — stacked against a stock already down 2.5% on the week and 1.9% over the past month — points to fresh conviction on the short side.

The ORTEX short score has ticked up to 36.3, its highest reading of the past two weeks.

Borrow Costs Double, But Supply Is Abundant

Cost to borrow has risen sharply. CTB hit 0.50% on Wednesday, up 55% over the week and roughly double the level from early September. In absolute terms, borrowing remains cheap. But the rate of change matters — a doubling of borrow costs in nine days signals genuine demand for short exposure.

Critically, availability sits at 3,282% — meaning shares to borrow dwarf the current short position by a wide margin. There is no squeeze risk here. Bears can add freely.

What to Watch

Next earnings are scheduled for November 4. Between now and then, the key question is whether the analyst cuts are finished or just beginning. Three firms lowered targets in August alone. A fourth major downgrade — particularly from one of the remaining bulls — could accelerate the short build.

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Data summary

• Price: $164.81 (–1.1% Wednesday, –2.5% week)
• SI % FF: 2.78%, up 21.7% day-on-day, up 29.5% month-on-month
• Cost to borrow: 0.50%, up 55% week-on-week
• Availability: 3,282% — ample borrow supply
• ORTEX short score: 36.3 (2-week high)
• Consensus: Hold | Mean target $186.55
• JP Morgan: Downgraded Overweight → Neutral; target $180 (from $198)
• Next earnings: November 4, 2026