RBC Cuts DCO Target as Short Interest Climbs to a New High

Short sellers have been quietly rebuilding positions in DCO this month, pushing short interest to its highest level in at least a year just days before the aerospace components maker reports quarterly results.

Short interest hit 6.1% of free float on October 27, up 10.4% over the past week and 10.6% over the past month. The absolute share count stood at around 906,000, after briefly touching 926,000 the previous day. That weekly increase is the sharpest in the 30-day window captured here, and it brings the short position to a level not seen in the preceding data series. Despite that build, the borrow market tells a different story. Cost to borrow has fallen 15.7% over the past week to 0.39%, the lowest reading in the 30-day window. Availability is extraordinarily loose at 1,846%, meaning there are roughly 18 shares available in the lending pool for every one already borrowed. The borrow squeeze argument does not apply here. Shorts can add without friction, and the falling cost suggests they have been doing exactly that.

Options positioning has shifted toward calls over the past month. The put/call ratio dropped to 0.56, about 1.3 standard deviations below its 20-day average of 0.61. That reading sits closer to the 52-week low of 0.04 than to the 52-week high of 0.75, marking a period where call interest has dominated. The contrast between rising short interest and a call-tilted options market is the defining tension in DCO's positioning right now. Two groups appear to be leaning in opposite directions ahead of the November 5 earnings date.

The analyst angle has become more cautious this week. RBC Capital's Ken Herbert cut his price target to $180 from $200 today, while maintaining a Sector Perform rating. That move follows a Guggenheim initiation in early October at Buy with a $246 target, which sits well above where the stock is trading at $164.79. The mean analyst price target of $220 implies substantial upside from current levels, though the RBC trim reflects some erosion of conviction in the near term. The bear case centers on customer concentration risk. Boeing and RTX together account for roughly 31% of 2025 revenue, and the top ten customers represent 61%. The company also carries restatement overhang: a 10-K/A restatement flagged material weaknesses and triggered a $5 million executive compensation clawback. The bull case rests on missile and electronic warfare momentum, with missile revenues reportedly up 68% in the latest quarter and remaining performance obligations at an all-time high. Management's Vision 2032 plan targets 600 basis points of margin expansion. The EV/EBITDA multiple sits at 16.0x, roughly flat over the past 30 days, while the PE ratio has compressed to 31.8x from 33.1x a month ago.

One ownership development worth noting: GAMCO Asset Management filed a Schedule 13D on DCO in March, making it an activist on the register. GAMCO's most recent institutional filing shows 525,059 shares, or 3.5% of the company. Meanwhile, BlackRock Portfolio Management filed a fresh Schedule 13G on October 27, the same day as this snapshot, disclosing a 5.3% stake. BlackRock Inc. as a whole now holds 12.9% per the latest institutional data, having added 171,251 shares in the most recent quarter. Insider activity in the 90-day window has been net negative, with CEO Stephen Oswald selling around 13,000 shares in open-market transactions in August at prices between $195 and $204, generating net disposals of roughly $3.4 million. None of those trades were executed under a 10b5-1 plan, which gives them more weight as a signal than pre-arranged sales would carry. Oswald simultaneously exercised options at $32.90, standard compensation mechanics that do not reflect conviction in the same way.

Wikipedia attention for DCO spiked to a z-score of 3.7 relative to its own 90-day history as of October 21, the highest retail attention reading in the dataset's recent range. That spike preceded the current short-interest build and the RBC target cut by several days, suggesting the stock was attracting unusual scrutiny ahead of both moves.

The stock fell 1.0% over the past week, broadly in line with close peers. MOG.A dropped 3.0% and LOAR lost 1.3%, while MRCY gained 5.4% and PKE added 3.5%. The spread across the peer group is wide, and DCO's relative flatness keeps it near the middle of the cohort. The next data point that matters is the November 5 earnings print, which will test whether the short-interest build and the RBC target cut were well-timed or premature.