EGP Short Sellers Hold Firm as Stock Climbs 5% on the Week

EastGroup Properties reported Q3 results today with short sellers at their most committed position in at least a year, yet the stock has moved decisively in the other direction.

The share price closed Wednesday at $203.30, up 5% over the past week. That compares poorly for the bears: the closest industrial REIT peers, including FR, TRNO, and PLD, lost a median of roughly 0.9% over the same period. Short interest stands at 7.6% of free float, built almost entirely over six weeks. In mid-September, the position was around 2.2 million shares. By early October it had grown to 4.1 million, where it has broadly stayed, edging down just 0.1% on October 20 but still up 46% over the past month. The ORTEX short score moved from 50.2 to 55.5 in a single session on October 8 and has not retreated since. Options positioning reflects the same defensive lean: the put/call ratio runs at 2.50, well above its 20-day average of 1.78, though still within about one standard deviation of recent norms.

What the lending market refuses to confirm is any squeeze dynamic. Availability is running at 750%, roughly seven shares available for every one already borrowed, a level that has barely changed week to week. Borrowing costs have fallen 22% over the past week to 0.39%, one of the lowest readings of the past month. The bears have built a large position by conviction, not because the borrow was cheap or tight at the wrong moment.

The analyst community is split, and recent moves tilt modestly cautious. JP Morgan upgraded to Overweight in late September at a $231 target, a positive signal. But Piper Sandler cut its target from $268 to $246 on October 12 while holding Overweight, and Evercore ISI has trimmed its target three times since mid-September, settling at $199. The mean target across the analyst group is $226.60, about 11% above the current price. The bull case rests on EastGroup's Sun Belt shallow-bay portfolio, 20% cash re-leasing spreads, $265 million in raised development starts, and a balance sheet running at 3.0x net debt to EBITDA. The bear case is simpler: at roughly 27.6x 2026 AFFO, the stock prices in a recovery that tariffs, oversupply, or softer consumption could delay, and projected FFO growth of 6.5% to 7.0% leaves little cushion if leasing momentum stalls.

The Q3 print will test whether EastGroup's leasing activity and re-leasing spreads held up through the quarter, and whether management's tone on 2027 development underwriting is confident enough to justify paying a premium multiple while one of the largest short positions in a year remains parked in the stock.