Ambev Short Interest Hits Year Low Before Wednesday Print

ABEV reports Q3 results on Wednesday with short sellers retreating at the fastest pace in over a year, a shift that stands out given how bearish the Street has been on the Brazilian brewer.

Short interest has fallen 37% over the past month to roughly 89.9 million shares, its lowest level in the period covered by ORTEX data. The drop accelerated in mid-October: positions were cut by more than 35% in the two weeks after October 8, when short interest was running near 136 million shares. The lending market reflects the same change in direction. Availability has loosened to 179%, meaning nearly twice as many shares are available to borrow as are currently borrowed, well above the 52-week tightest reading of 8.5%. Cost to borrow is modest at 1.55%, though it has jumped 53% over the past week, a small uptick worth watching but not yet a signal of squeeze pressure. The ORTEX short score has also eased to 47.8, down from above 52 earlier in October, consistent with a market where short conviction is fading rather than building.

The analyst community has moved in the opposite direction to the short sellers. B of A Securities downgraded ABEV to Underperform on October 7, maintaining a $3.30 target that matches the current price exactly. That follows UBS moving to Sell in April and Scotiabank stepping down to Sector Perform in July. The direction of travel is clear: the major firms covering ABEV see limited upside from here. The stock is up 10% over the past month and 0.3% over the past week, trading at $3.30. A price-to-earnings multiple of 15.8x and EV/EBITDA of 7.7x are not demanding for a company of this size, but the forward earnings picture is weak. The 12-month forward EPS growth estimate is deep in negative territory, sitting in the 27th percentile of the ORTEX universe, and a string of broker downgrades suggests the consensus has yet to find a floor on where growth stabilises.

Options positioning offers little drama. The put/call ratio is 0.39, virtually in line with its 20-day average, and the z-score is close to zero. Whatever the short sellers and analysts are doing, options traders are not hedging aggressively into Wednesday's print.

On ownership, Anheuser-Busch InBev controls 63% of shares, which keeps the free float tight and amplifies any repositioning by smaller holders. Goldman Sachs added over 16 million shares as of its last disclosure in June, a notable move given its otherwise small position. On the insider side, the net flow over the past 90 days is a modest sale of around 529,000 shares, led by a director who sold $1.4 million worth on July 30. The March grants to several executives, including the CEO, were compensation awards rather than open-market purchases and carry limited informational weight.

Wednesday's print will test whether the volume-driven rebound in the stock over the past month reflects genuine improvement in Brazilian consumer demand, or whether the Street's increasingly cautious ratings have simply not yet caught the attention of short sellers who are covering into the event.