Two forces are pulling SO in opposite directions right now. Short sellers have added aggressively over the past week. Options traders are buying calls. The divergence is worth watching.
Short interest in The Southern Company jumped 27.8% in a single week. It now stands at 2.91% of free float — still a low absolute level, but the pace of accumulation is striking for a regulated utility.
The cost to borrow reflects that demand. It rose 64% over the week to 0.63%. That's up roughly 28% over the past month too.
Despite that move, the lending market remains wide open. Availability sits at 5,666% of short interest. There are vastly more shares available to borrow than are currently lent out. Short sellers face no supply constraint here.
The stock is down 7.1% over the past month. That selloff appears to be driving the new short positions.
The put-call ratio tells a different story. It dropped to 0.80 this week, the lowest reading in two weeks. The 20-day average is 0.82. Call buying has picked up relative to puts.
The 52-week PCR range runs from 0.46 to 0.89. At 0.80, sentiment sits in the upper half of that range — not extreme, but the recent direction favors calls.
Options traders appear to be positioning for a rebound after the recent selloff.
The analyst backdrop is cautious. Consensus is a hold with a mean price target of $99.97 — roughly 16% above current levels at $86.23.
But recent moves have been downward. Morgan Stanley's Stephen Byrd cut his target to $89 in August, maintaining an Underweight rating. Truist's Richard Sunderland trimmed to $97. Keybanc downgraded to Underweight in July with a $79 target.
BMO Capital and JP Morgan remain constructive, with Outperform and Neutral ratings respectively. That split between bulls and bears mirrors the options vs. short interest divergence visible in the data.
The next earnings date is 29 October. The last quarterly print saw the stock fall 1.6% on the day and 3.3% over five days.
See the live data behind this article on ORTEX.
Open SO on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
