HST options skew turns bearish as analysts lift targets

Host Hotels & Resorts, the US hotel REIT owning roughly 80 luxury and upper-upscale properties, saw its put-call ratio jump to 3.26 on Thursday. That is 2.6 standard deviations above its 20-day mean of 1.63, and close to the 52-week high of 3.73.

Put buying runs against a softening borrow market

The options skew shift is the sharpest signal in Thursday's data. Puts outnumber calls by more than three to one, a ratio that has held above 3.25 for two consecutive sessions after sitting below 1.1 as recently as October 15.

The borrow market tells a different story. Cost to borrow has fallen 51.8% over the past week to 0.26%, its lowest level in months. Availability stands at 3,069%, meaning shares available to borrow outnumber shares already borrowed by more than 30 to one. That is well above the 52-week trough of 1,089% recorded on 30 September. There is no shortage of supply for short sellers, but the sharp drop in borrow cost suggests the put buying is not being accompanied by a surge in new short positions.

Short interest sits at 5.49% of free float, down roughly 2.3% over the past month from a peak near 6.6% in late September.

Analysts moving in one direction

Three firms raised price targets in October. Wells Fargo lifted its target to $27 on Monday, maintaining an Overweight rating. Barclays moved to $25, and Morgan Stanley to $24, both keeping Equal-Weight calls. The consensus target is $25.82, against a last close of $24.72.

Earnings are due 4 November. The past two quarterly prints both produced one-day drops of more than 6%, which may explain some of the defensive options positioning ahead of the report.

Retail attention picks up

Wikipedia views and ORTEX stock-page traffic combined to produce a retail attention reading of 3.2 standard deviations above the 90-day average as of 19 October. The dataset has no measured relationship to Host's financial results, so this is colour rather than signal, but the timing alongside the options move is worth noting.

BlackRock added 10.9 million shares in the quarter to 30 September, lifting its reported stake to 12.9% of shares outstanding.

Data summary

• Put-call ratio: 3.26, z-score of 2.6 vs 20-day mean of 1.63
• Cost to borrow: 0.26%, down 51.8% over the past week
• Availability: 3,069%, well above the 52-week low of 1,089%
• Short interest: 5.49% of free float, down 2.3% over the past month
• Wells Fargo price target raised to $27 (Overweight); consensus target $25.82
• Next earnings: 4 November