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AT&T heads into its October 21 quarterly print having shed 6.5% over the past week to $22.85, with short sellers adding exposure at the fastest pace in months even as options traders and analysts lean the other way.
The most notable shift since the previous note is in short positioning. Short interest has risen 13.7% over the past week to roughly 143 million shares, now 2% of the free float. That is still low in absolute terms, but the pace of accumulation is meaningful: the move extends a trend that has pushed the short book up nearly 18% over the past month. The borrow market itself remains entirely unthreatening. The cost to borrow edged up to 0.43% but is still historically cheap, and availability is vast: there are roughly 2.9 billion shares available to borrow against the existing short book, placing availability at over 4,000%. This is not a stock where a squeeze is anywhere near the table. The shorts building here are doing so with frictionless access to borrow and no cost pressure.
Options positioning pulled in the opposite direction. The put/call ratio dropped to 0.60, well below its 20-day average of 0.67 and nearly 1.5 standard deviations below it. That is the most call-skewed reading in recent weeks, suggesting options traders are tilting toward upside exposure into the print rather than hedging for a drop. The contrast is worth naming: shorts are accumulating at pace while options traders are positioned more bullishly than at almost any point in the past month.
The Street broadly supports the bullish read. Eleven analysts carry buy-equivalent ratings versus ten at hold, with a consensus price target of $28.76 against a current price of $22.85, implying roughly 26% upside from here. The most recent analyst action has been negative on balance: Scotiabank's Maher Yaghi trimmed the target twice in quick succession, first to $27.50 and then to $26.50 last Thursday, keeping a Sector Perform rating. That said, Morgan Stanley raised its Overweight target to $28 in late September, and BNP Paribas upgraded to Outperform with a $30 target around the same time. The bull case rests on the converged services strategy, a postpaid customer base of 74 million, and free cash flow from the DirecTV disposal. Bears point to ARPU pressure dragging wireless revenue growth, a legacy segment that is expected to become an EBITDA headwind beyond 2027, and a dividend payout ratio above 100% for the foreseeable future. Valuation looks modest: the stock trades at roughly 9x trailing earnings and just over 6x EV/EBITDA.
On the ORTEX factor scores, AT&T ranks in the 74th percentile for EPS surprise and 64th percentile for EV/EBIT, both reinforcing the value-and-delivery framing. Momentum, as the recent stock-score notes have flagged, remains the weak spot: the stock is down 12% over the past month, and the short score has drifted up to 32.7 from around 31.2 a fortnight ago, though it remains well below levels that would signal serious short-side conviction. Wikipedia attention is running at a z-score of 1.5 versus the past 90 days, indicating above-normal retail interest, likely a function of the share price slide and the approaching earnings date.
The prior note flagged a sharp jump in cost to borrow ahead of earnings and mild call-side options tilt. Both observations have persisted into this week: CTB has risen again while the put/call ratio has dropped further below its mean. What has changed is the share price, which has fallen another 6.5% since that note, and the pace of short-side accumulation, which has accelerated. The earnings history offers some context: the last print in July produced a 3.1% one-day gain and a 7.5% five-day rally. The print before that saw a 2.9% decline on the day before recovering. The asymmetry between shorts adding and options traders buying calls makes the October 21 release the clearest thing to watch over the next week.
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