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Popular, Inc. enters its October 22 Q3 earnings print with the stock still well below summer highs and options traders showing the most defensive posture in weeks, even as analysts nudged targets higher just days before the release.
The sharpest move this week is in options positioning. The put/call ratio has jumped to 0.48, nearly 1.85 standard deviations above its 20-day mean of 0.34, the most defensive reading since early September. For context, the 52-week low on the PCR was 0.06, and the high was 0.61, so the current reading is well into the upper half of the annual range. The shift happened abruptly: through most of September the ratio sat between 0.26 and 0.36, then moved sharply higher at the start of October. That suggests options buyers are adding downside protection specifically as earnings approach rather than as part of a broader trend.
The borrow market tells a completely different story. Availability is extraordinarily loose at 7,332%, meaning there are roughly 73 times as many shares available to borrow as are currently borrowed. Short interest is a modest 2.6% of free float, down about 1% on the week, and the cost to borrow has dropped 14% over the past week to just 0.36%. There is no meaningful short pressure here, and no squeeze risk. The September 10 episode, when availability briefly tightened to 1,816% and cost to borrow spiked to 1.15%, has fully unwound. Lending conditions are now back to their loosest point of the past several weeks.
The analyst community shifted direction this week. Barclays raised its price target to $205 from $200 on October 5, keeping an Overweight rating, a move that runs counter to the previous two actions: Wells Fargo and Citigroup both trimmed targets in late September, cutting from $200 to $195 and from $200 to $192 respectively, while maintaining positive ratings. The consensus mean target is $195.20, roughly 23% above the current price of $158.29, and every recent action has kept a buy-equivalent rating intact. The bull case rests on Q2's strong core EPS of $4.35, a 4.17% net interest margin, and a $1.0 billion buyback alongside a 20% dividend increase. The bear case centres on Puerto Rico's structural headwinds, two commercial loans totalling $129 million that drove NPL inflows higher, and a provision for credit losses that remains elevated at $66 million. The PE multiple has contracted roughly 0.8 turns over the past 30 days to 9.4x, while the price-to-book has pulled back to 1.4x, both moving in the direction of cheaper rather than richer.
The insider picture has not changed materially since the note published on September 30. The 90-day net remains negative 53,561 shares with net proceeds of approximately $9.4 million, anchored by CEO Javier Ferrer's discretionary open-market sale of 35,000 shares at roughly $175 on August 10. The stock has since fallen to $158.29. No new discretionary buying has appeared on the register. On the institutional side, T. Rowe Price added 404,000 shares as of September 30 to hold 7.4% of shares, while Vanguard trimmed 370,000 shares at the June reporting date. No 13D activist filings are on the register; all large holders have filed passive 13G schedules.
ORTEX Alt Data covers Popular through FDIC call reports, which show the bank's total assets have risen for three consecutive quarters and reached a record Q2 high of $78.4 billion. The FDIC dataset has not yet accumulated enough history to be tested as a leading indicator against Popular's reported figures, so it is colour rather than signal for the upcoming print.
With Q3 results due on October 22, the key question is whether the credit quality deterioration flagged in the bear case has stabilised or broadened beyond the two borrower-specific NPL inflows that defined Q2.
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