DAL heads into its October 9 earnings report with short sellers cutting positions sharply, options traders turning distinctly bullish, and Warren Buffett quietly building a larger stake — a rare alignment of signals pointing in the same direction.
The short-side story is the most striking development of the week. Bears have pulled back hard, with short interest falling 18% across the past five trading sessions to 3.4% of the free float — roughly 22.3 million shares. That's down from a peak near 27.3 million shares on September 16, a retreat of more than 5 million shares in under two weeks. The borrow market reflects the ease of that exit: cost to borrow is just 0.50%, and availability has ballooned to 1,709% of outstanding short interest, well above even the 52-week floor of 692%. There is no friction in the lending pool. Bears aren't being squeezed out — they're choosing to leave.
Options traders are making an equally clear statement. The put/call ratio hit 0.52 this week — the lowest reading of the past 52 weeks, against a 52-week high of 1.23. Relative to the 20-day average of 0.82, that PCR sits nearly 1.4 standard deviations below normal, the most call-heavy positioning DAL options have seen all year. Through August and early September the ratio was running above 1.0 — more puts than calls, with investors hedging for downside. That protection has been aggressively unwound. Call activity now dominates, and the shift happened quickly: the PCR was above 1.0 as recently as September 11 and has nearly halved in two weeks, tracking almost step-for-step with the collapse in short interest.
The Street is broadly constructive, though the analyst picture has some nuance. UBS raised its target to $105 from $99 on September 24, maintaining its Buy rating — a meaningful move two weeks before the print. That followed a target-raise from Rothschild on September 18. The earlier September saw the opposite direction: Barclays trimmed to $95 from $105 on the 11th, and UBS had itself cut to $99 from $112 on the 10th, with Raymond James and TD Cowen both cutting targets in late August. The net effect is a consensus price target of $103.15, roughly 21% above the current price of $84.94, with bulls clustered in the $105-$125 range. DAL trades at a PE of 10.5x and EV/EBITDA of 6.7x — modest multiples for a carrier with an EPS surprise factor score in the 89th percentile and 90-day EPS momentum in the 83rd. The ORTEX short score has dropped to 37.5 from 41.1 a week ago, consistent with the broad short-side retreat.
The most consequential ownership move worth flagging is Berkshire Hathaway's stake, now disclosed at 8.7% of shares — up from 6.1% in the prior filing, with 57.3 million shares reported as of June 30. Warren Buffett's 13G/A filed August 14 reflects the single largest disclosed increase in the institutional register this period. The insider register is less bullish in isolation: CEO Ed Bastian sold 206,510 shares on August 4 for roughly $19.2 million, alongside coordinated sales by the President and two EVPs — though all transactions were paired with option exercises (transaction code M), making them compensation-related monetisations rather than discretionary conviction sells. Net insider activity over 90 days runs to -$38.5 million in value and -427,057 shares, but the structure of the trades tempers the signal significantly.
The last comparable earnings print, in July, produced a 3.2% one-day decline and a 5.4% five-day slide — a reminder that even broadly-owned, well-covered carriers can disappoint on the day. The October 9 report is the next concrete inflection point, and the question heading into it is whether the sharp repositioning — shorts down 18% in a week, PCR at a 52-week low, Buffett adding — reflects genuine optimism about the quarter or simply the market running aggressively light on downside protection at the worst possible moment to do so.
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