Diageo Shorts Ease as Call Buyers Take Control Into Wednesday's Print

DEO options positioning has shifted decisively toward calls in the run-up to Wednesday's results, a reversal from the more cautious stance that dominated earlier in the quarter.

The put/call ratio has dropped to 0.52, well below its 20-day average of 0.63, near the bottom of its 52-week range of 0.47 to 1.04. Through early October, the ratio held comfortably above 0.70. The move lower accelerated as the print approached, reflecting genuine call demand rather than a mechanical unwind of hedges. A previous ORTEX preview noted the same bullish options tilt ahead of an October 29 session. That positioning has held, and the call bias is intact entering Wednesday's event.

The borrow market tells a complementary story. Availability tightened sharply through mid-October, dropping to near zero on October 14 when virtually every share in the lending pool was out on loan. Since then, pressure has eased substantially. Availability recovered to 57% by October 29, with borrowing costs falling 28% over the week to 0.91%. Short interest itself remains modest, running near 3 million shares and declining roughly 9% over the past month. None of this signals meaningful short conviction.

The analyst backdrop is mixed but recent moves lean constructive. Morgan Stanley's Sarah Simon raised her price target to $83 from $76 on October 26, while maintaining an Underweight rating. The target remains below the current price of $93.44, and Morgan Stanley stays negative on the name. TD Cowen moved to Buy in June at a $93 target. Bank of America holds a Buy but trimmed its target to $109 in late 2025, reflecting caution on the growth outlook without abandoning the bull case. The mean consensus target in the data predates recent price action and should not be treated as current.

The print will test whether Diageo's recovery in premium spirits demand is durable enough to close the gap between the cautious analyst framing from Morgan Stanley and the more optimistic positioning reflected in the options market.