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Albertsons Companies enters its October 13 earnings print with short interest now above 10% of the free float and options traders firmly positioned for further upside, a divergence that makes the setup more charged than it was a week ago.
Short sellers have continued adding since the last note. Shares short reached 55.5 million as of October 6, pushing the short interest to 10.1% of the free float. That is up 4.4% on the week and represents a further step up from the 54.2 million figure reported just days ago. The ORTEX short score has ticked up to 68.8, its highest reading in the 10-day window. Yet the borrow market still shows no distress. Cost to borrow has actually eased over the week to 0.51%, down roughly 9% from seven days prior. Availability remains generous at 224% of current short interest, nearly unchanged from the 230% level cited in the prior note. More than two shares are available to lend for every one already borrowed, so the build in short interest reflects a deliberate directional bet, not a technical squeeze setup.
Options positioning tells the opposite story. The put/call ratio is running at 0.29, essentially flat against its 20-day average of 0.29 and at the lower end of the 52-week range (0.22 low, 0.84 high). Call volume continues to dominate. With earnings six days out and the stock off 8.5% over the past month to $11.48, options traders have not moved defensively. The contrast with the short book is direct: bears are building via the lending market while options participants are positioned for a bounce.
The Street is cautiously constructive but has materially reset expectations since July. Following the sharp single-day drop of roughly 24% after the prior quarter's report, multiple firms cut targets and several downgraded. Goldman Sachs retained a Buy but dropped its target from $24 to $16. JPMorgan kept Overweight and cut from $20 to $14. UBS and Citigroup both downgraded to Neutral, with targets in the $11 to $12 range. The mean consensus target now sits at $14.33, implying roughly 25% upside from current levels. RBC Capital reiterated its Outperform at a $13 target as recently as this week, the only significant move in the past 14 days. At 6.3x trailing earnings and around 5.75x EV/EBITDA, the valuation is undemanding for a food retailer, and the forward EPS momentum factor scores in the 95th percentile, meaning the earnings trajectory is expected to improve materially from here.
Insider buying remains the most concrete piece of conviction data in this setup. CEO Susan Morris bought just over 39,000 shares in late July at prices around $11.38 to $11.46. CFO Sharon McCollam added 9,000 shares at $11.48 on July 31. EVP Thomas Moriarty purchased 170,500 shares for roughly $1.96 million, also in late July. All were open-market purchases with no 10b5-1 plan declared. The cluster spans three separate executives and totals approximately $2.5 million in net buying. All three bought at prices within a few cents of where the stock trades today, meaning their cost basis has not improved.
On the ownership register, Cerberus Capital Management holds a dominant 31.3% stake and has not changed its position in the most recent filing period. BlackRock raised its position to 8.1% in a July 13G/A amendment, up from 6.9% previously. The Vanguard Group filed a 13G/A in March showing a reported stake of 0%, down from 7.16%, though the firm's various asset management arms still show meaningful holdings in the institutional register. Per the standard 13D/G caveat, these positions are as-last-disclosed around the 5% threshold.
The prior quarterly earnings print saw the stock fall 24% on the day and close the following week down roughly 21%. The question heading into October 13 is whether the setup that drove that reaction, which appears to have been a significant guidance or margin miss, has been fully absorbed in the current price, or whether shorts now above 10% of the float have identified a repeat risk.
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