Options traders are making the loudest bullish statement on CVS Health in weeks. The put-call ratio hit 0.876 on September 28 — 2.4 standard deviations below the 20-day mean of 0.93. Calls are outpacing puts by the widest margin in three weeks.
That shift in options positioning coincides with a notable exit by short sellers.
Short interest has dropped 14.7% in one week to 1.24% of free float — near three-year lows. A week earlier it stood at 1.46%. A month ago it was closer to 1.37%.
At 1.24% of float, the short position is too small to tell a meaningful structural story. But the speed of the exit is worth noting. Roughly 4.9 million short shares have been closed over the past week. That's not a squeeze — there's no supply constraint. Availability in the lending market is at its theoretical maximum, with over 1.27 billion shares available to borrow. The borrow pool is enormous relative to any demand.
Short sellers aren't leaving because they're being squeezed out. They're leaving by choice.
The cost to borrow rose 56% over the past week to 0.49%. That sounds dramatic. In practice, it's a near-zero fee moving to a slightly-less-near-zero fee. At 0.49%, CVS remains one of the cheapest names to short in the market. The one-month borrow cost is actually down 6%. There is no borrowing pressure worth flagging here.
CVS trades at $87.85 — roughly flat on the week but down 5.6% over the past month. The previous ORTEX note from September 23 captured the stock at $87.10, amid a sector-wide healthcare sell-off that hit peers hard. That pressure has eased somewhat: HUM is up 2.9% on the week, ASTH up 4.7%.
Analysts remain firmly bullish. UBS holds a Buy with a $118 target. JP Morgan's Lisa Gill maintained Overweight with a $118 target in August. Wells Fargo and Truist both carry Overweight/Buy ratings with targets above $120. The consensus sees roughly 30% upside from current levels.
Next earnings are scheduled for November 4.
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