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AT&T reports Q3 results on October 21 with a notably different short-interest picture than the one described just four days ago: the short book has unwound sharply since the previous note, even as the stock has rebounded and options traders remain tilted toward calls.
The reversal in short positioning is the clearest data point heading into the print. The October 14 article reported roughly 143 million shares short. That figure has since dropped to 131 million, a decline of roughly 8% in two sessions, pulling short interest back to 1.85% of the free float. The move reverses much of the accumulation that had been building through early October and brings the short book closer to its late-September baseline. Borrow conditions remain entirely frictionless: cost to borrow has ticked up to 0.50% on the week, a 36% rise, but the absolute level is negligible, and availability is vast at over 7,000%, meaning lenders hold more than 70 shares available for every share already borrowed. There is no squeeze mechanics in play. The stock itself has bounced, recovering to $23.44 after the 6.5% drop noted earlier in the week, a 5.7% gain over the past five days.
Options positioning continues to lean bullish rather than defensive. The put/call ratio is 0.61, running about 1.3 standard deviations below its 20-day average of 0.65. That is the same directional read as the prior note: call positioning dominates, and the skew has persisted even through the stock's mid-October weakness. The combination of retreating short interest and call-heavy options flow suggests the market is not positioned for a downside surprise on Wednesday.
The analyst community is broadly constructive but with pockets of caution. Morgan Stanley has maintained its Overweight rating and lifted its target to $28, while BNP Paribas upgraded to Outperform with a $30 target in late September. Scotiabank has moved in the opposite direction, trimming its target twice in the past two weeks from $29.25 to $26.50 while staying at Sector Perform. The consensus sits at Buy with a mean target of $28.76, implying roughly 23% upside from current levels. Bulls point to AT&T's 74 million postpaid phone customers, projected 6% EBITDA growth in 2026, and the trajectory of its converged-services push. Bears flag ARPU pressure weighing on wireless service revenue growth, the legacy segment becoming a drag beyond 2027, and a payout ratio that is expected to stay above 100% for at least two more years.
Institutional ownership is stable and index-heavy. BlackRock holds 8.2% and Vanguard's entities together account for a further 9% or so, with State Street adding 18.5 million shares in the most recent reported quarter. Insider activity in the period has been routine: the recent transactions are compensation-related awards and tax withholdings rather than open-market purchases or sales, so they carry no directional read.
Wednesday's print will test whether AT&T's wireless subscriber trends and EBITDA trajectory are tracking the constructive case that most of the Street and options market appear to be pricing in, or whether ARPU erosion is cutting deeper than the consensus expects.
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