ADC Shorts Surge 34% as Options Turn Bullish Before Earnings

Agree Realty heads into its Q3 2026 print today with a striking divergence: short sellers have been piling in while options traders are positioned for upside, the two crowds leaning in opposite directions into the same event.

The short interest story is the sharpest signal. Bears have added aggressively over the past month, pushing short interest up roughly 34% in a week to 6.8% of the free float, a level that deserves attention for a net lease REIT. The share count borrowed crossed 7.8 million as of October 16. What makes the build more notable is its speed: shares short were closer to 5.4 million in early October before jumping sharply around October 8. Borrow costs remain low at 0.42%, rising about 22% on the week but still nowhere near squeeze territory. Availability is comfortable at 326%, meaning there are more than three shares available to borrow for every one already shorted, so the lending market is not constraining the bears.

Options traders tell the opposite story. The put/call ratio has collapsed to 0.41, more than two standard deviations below its 20-day average of 1.52. That is one of the most call-skewed readings in the past year, close to the 52-week low of 0.11, pointing to strong demand for upside exposure heading into the print. The stock has lost 3.3% over the past month to $65.82, slipping 1.8% on Monday alone, with net lease peers NNN and O both gaining around 1% on the day. ADC is underperforming its closest comparables on a one-day and one-week basis across the board.

The analyst community has been consistently trimming targets through September and into October, yet the bullish thesis remains intact at most firms. Wells Fargo cut its target to $79 from $83 on Monday while holding its Overweight rating. Truist, Evercore ISI, Stifel and Mizuho all lowered targets in September, but the mean across the coverage group still sits at $80.67, implying roughly 23% upside from current levels. The bull case rests on ADC's balance sheet strength, investment-grade tenant mix anchored by Walmart, 7-Eleven and Wawa, and a Q1 2026 AFFO beat of around 3%. Bears point to financing friction: the company's recent $400 million senior notes priced at a 5.849% effective yield, and if acquisition spreads compress, the rapid-deployment model that underpins AFFO growth becomes harder to sustain.

Insider buying adds a further layer of conviction on the long side. Director John Rakolta Jr. made three separate open-market purchases totalling 50,136 shares worth roughly $3.6 million between late August and mid-September, all without a 10b5-1 plan. CEO Joey Agree added 7,360 shares at $68.06 on September 16, also discretionary. Net insider buying over the past 90 days totals around 58,500 shares worth $4.1 million, an unusually concentrated cluster of purchases in the two to three months before the print. BlackRock added 1.2 million shares as of September 30, bringing its stake to 15.4% of shares outstanding.

The print will test whether ADC's acquisition pace and financing costs can hold the AFFO growth rate that justifies a stock trading at roughly 35 times earnings while its peers are recovering and it is not.