DGX shorts keep retreating as call buyers stay in charge

Why this matters: Quest Diagnostics reported Q3 results on October 22. The stock gained 1.2% on the day and has added 2.9% over the past week. Short sellers have not returned.

Bears continue to exit

Short interest now stands at 2.62% of free float, down 4% over the past week and 18% over the past month. In absolute terms, roughly 2.9 million shares are short. That is the lowest level since early September.

The retreat accelerated through October. From a local peak of around 3.8 million shares short in mid-September, positions have been cut steadily and without reversal. The post-earnings session on October 22 brought a small one-day uptick of 3.4%, but the monthly trend is clearly lower.

Borrow conditions give no reason for bears to fight back. Availability stands at 1,707%, meaning roughly 17 shares are available to borrow for every one currently lent out. That compares with a 52-week low availability of 721%. The cost to borrow sits at 0.50% annually, up 18% over the past week but still among the cheapest in the market. No borrow squeeze is in prospect.

Options market normalises from an extreme

The put/call ratio has recovered to 0.68 from the 52-week low of 0.29 hit on October 19 and 20, ahead of the earnings print. It remains below the 20-day mean of 0.96, which itself has been pulled down by weeks of heavy call buying. The PCR ran above 1.35 as recently as early October. The speed of the compression was the story before results. Now it is slowly mean-reverting.

Institutional flow and analyst framing

Boston Partners added 732,241 shares as of September 30, the largest change among the top 15 holders. BlackRock added 190,907 shares over the same period. The analyst consensus sits at buy, with a mean price target of $254.73. The stock closed at $241.89 on October 23, a 5.3% discount to that target. Barclays raised its target to $260 on October 7, maintaining Overweight.

Buyback authorization remaining stands at $1.3 billion, up 44% on the same period last year, per SEC EDGAR XBRL data. Buyback spend was up 99% on Q4 last year.

Data summary

• SI % FF: 2.62%, down 4% on the week, down 18% on the month
• Shares short: approximately 2.92 million (October 22)
• Availability: 1,707% (52-week low: 721%)
• Cost to borrow: 0.50% annually
• Put/call ratio: 0.68, recovering from 52-week low of 0.29
• Mean analyst price target: $254.73, stock at $241.89
• Next earnings: February 5, 2027