POSCO Holdings: Options Stay Bullish Despite Further Slide

PKX heads into its November 2 earnings print with options traders still leaning constructive, even as the stock has lost another leg lower since the last preview.

The price has slipped a further 0.4% from the $52.35 level noted six days ago, closing at $52.14 after an 8.4% decline over the past month. The week's move alone has been -6.6%. Despite that continued weakness, options positioning has not turned defensive. The put/call ratio is 0.78, nearly a full standard deviation below its 20-day average of 0.83. That places call demand comfortably ahead of put demand heading into the release, a pattern that has held even as the stock has ground lower.

The borrow market remains quiet, with nothing to suggest short sellers are driving the price action. Cost to borrow has fallen sharply, down 65% over the past week to just 0.30%, a fraction of where it was earlier in October when it was running above 1.2%. Availability is running at 885%, meaning shares available to lend remain abundant relative to those already borrowed. Short interest has edged up around 4.6% over the past month, but the absolute level is small and the borrow conditions remain loose. The squeeze dynamic is simply not present here.

The most material analyst move in the recent window was UBS upgrading PKX to Buy from Neutral in late April. The consensus mean price target on record is well above the current price, though that figure dates to 2023 and should be treated with caution given the gap. What is more current is the factor profile: PKX scores in the 87th percentile for EPS surprise, and the dividend score ranks in the 90th percentile, both pointing to a company with a track record of delivering above expectations and returning capital. Set against that, forward EPS growth ranks only in the 27th percentile, reflecting the near-term earnings pressure that the steel sector broadly faces amid soft Chinese demand and compressed margins. Bulls are anchored on deep value, with price-to-book near historical lows. Bears point to the earnings trajectory.

On the institutional side, BlackRock has been adding. The firm reported 137,027 additional shares held as of September 30, lifting its stake to 6.8% of shares outstanding. Vanguard and Dimensional Fund Advisors also added modestly in the same period. The July earnings print produced a one-day gain of 9.2% and a five-day gain of 15.2%, the strongest near-term reaction visible in the history data, though a single data point is not a pattern.

The November 2 print will test whether the company's H2 execution justifies the call-side positioning that has built up through a month of declining prices.