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Home Depot heads into its November 17 earnings window with options traders holding their bullish posture from last week, even as short sellers continue a slow, steady accumulation that has now run for a full month.
The options signal has been the dominant story for two weeks and it has not reversed. The put/call ratio eased further to 0.69, the lowest reading in the past 45 days and close to the 52-week floor of 0.66. That puts the ratio more than 1.25 standard deviations below its 20-day average of 0.75. The previous note flagged call buyers reaching for upside on a stock that had fallen hard; that positioning has held. The stock has since recovered 2.5% on the week to $293.92, and call demand has not faded with the bounce. Borrow remains essentially a non-issue: availability is at its highest level on record for this name, meaning there is no squeeze pressure of any kind in the lending market.
Short interest, by contrast, is moving in only one direction. SI has climbed 7.5% over the past week to 1.17% of the free float, extending a month-long build that has now added roughly 14% to the short position. That brings short shares to about 11.7 million, the highest level in the 30-day window. The cost to borrow jumped 68% week on week to 0.53%, though in absolute terms it remains cheap. This is not a crowded short at 1.17% of float, but the consistent accumulation is worth watching as November earnings approach. The short score of 30.3 is broadly stable, sitting in the 71st percentile for its sector, suggesting the market is not yet treating this as a high-conviction bear thesis.
The Street remains constructively positioned but selective on valuation. The analyst consensus carries a mean price target of $379.75, representing about 29% above the current price. Bulls point to the Q2 beat: comps up 1.7%, US comps up 1.3%, EPS ahead by $0.19, and SRS and GMS continuing to deepen the company's reach into the professional contractor market. The bear case centres on the $685 million in tariff refunds that supported gross margin in the last print; strip those out and gross margin was down 117 basis points year on year, which makes the current 18.6x trailing earnings multiple look exposed if the housing cycle stays sluggish. The forward EPS trajectory earns an 82nd percentile rank, one of the stronger scores in the snapshot, but near-term EPS momentum sits in the 30s, reflecting a slower current environment. Bernstein trimmed its target to $344 in early September while holding Market Perform, which sits well below the group consensus. The more bullish houses, including UBS at $420 and Guggenheim at $425, still command the headline average.
Closest peer LOW gained 2.8% on the week, broadly in line with HD's 2.5% move, suggesting the recovery has been sector-wide rather than stock-specific. FND fell 4.8% over the same period, the notable underperformer in the group, while WSM and RH each lost ground, pointing to continued differentiation between the larger home improvement names and the smaller discretionary furnishing plays.
Ownership data adds a wrinkle from earlier this year. The Vanguard Group's 13G/A filing from March showed its stake falling to zero from a prior 10% position, a significant move given Vanguard Capital Management separately reported a 7.51% stake in April. The two Vanguard entities appear to reflect a structural reorganisation of beneficial ownership rather than a net exit, and BlackRock remains the largest disclosed holder at 8.2% as of September 30, with a near-3 million share addition in the latest period. Charles Schwab Investment Management and FMR each added over 3 million shares in their most recent reporting periods, adding to the picture of steady institutional accumulation at lower prices.
With the November 17 print 34 days out, the question is whether short sellers continue to build into earnings or whether the bullish options bias represents smarter money betting the stock has already priced in the housing headwinds.
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