PepsiCo Bears Sharpen Ahead of October 8 Earnings

Why this matters: Three distinct signals — rising short interest, elevated options hedging, and a cost-to-borrow uptick — have converged on PEP in the same 48-hour window. The stock is down 11.4% over the past month. Earnings land on October 8.

Short Sellers Return

Short interest jumped 20.8% in a single day on September 24. That brought SI to 1.84% of the free float — still a low absolute level, but a sharp reversal from the steady decline seen through most of September. One week ago, SI was 18.6% lower. One month ago, it was 12.7% higher than today's reading, meaning the recent drop and bounce form a clear V-shape into earnings.

At 1.84% of float, this is not a heavily shorted name. The direction matters more than the level here.

Options Hedging Near Peaks

The put/call ratio hit 0.6171 on September 23 — 2.32 standard deviations above its 20-day mean of 0.506. It has since eased slightly to 0.5811 as of September 24, pulling the z-score back to 1.42. But context is key. The PCR has run above its 20-day mean every single session since September 18. Defensive positioning has been the dominant options posture for over a week now. The 52-week PCR high sits at 1.3473, so the absolute reading is not extreme. The persistence of elevated hedging is the signal.

Previous ORTEX notes flagged the PCR at 1.94 standard deviations above mean on September 19, then at 2.56 on September 23. The latest data shows a slight moderation — but not a reversal.

Borrow Cost Ticks Up; Availability Stays Ample

Cost to borrow rose roughly 90% over the week ending September 23 to 0.44%. That sounds dramatic, but the absolute level remains low. Availability is essentially unconstrained — the lending pool holds far more shares than are currently borrowed. This is not a squeeze setup. The CTB move is more consistent with incremental demand for borrows ahead of a known event than any structural tightening.

BNP Paribas cut its price target on PEP to $161 from $183 on September 23, while maintaining its Outperform rating. The consensus mean target sits at $153.86 — still 20% above the current price of $128.15. That gap implies the Street sees value; the options market implies it also sees near-term risk.

Data Summary

• Price: $128.15, -1.6% on September 24, -11.4% over 30 days
• Short interest: 1.84% of free float, +20.8% day-on-day, +18.6% week-on-week
• Options PCR: 0.5811 (September 24); peaked at 0.6171 on September 23 (+2.32σ)
• Cost to borrow: 0.44%, low in absolute terms; availability remains very ample
• ORTEX short score: 30.8 — low, consistent with prior notes
• Next earnings: October 8, 2026