AVA Holds Its Own as Options Swing Bullish

Avista Corporation heads into the week with an earnings print just landed, options positioning turning notably more bullish, and short interest creeping up against a stock that has quietly climbed 8% over the past month.

The most striking shift this week is in options. Call demand has moved well above its recent norm, with the put/call ratio dropping to 0.45, more than 1.3 standard deviations below its 20-day average of 0.52. That makes the current options skew the most call-heavy it has been in several months, sitting close to the 52-week low of 0.30. The move stands out against a mild one-week gain of 1.8% to $38.11, suggesting options traders are not simply chasing the rally but are positioning for more. Peer utilities saw mixed sessions on the day, with WEC up 3.6% on the week and AEE adding 1.5%, while UTL slipped 0.2%. AVA's gain sits comfortably in the middle of the peer pack.

Short interest tells a more cautious story beneath the surface. The short position has edged up 2.2% over the past week to around 4.9% of the free float, reversing a broader monthly decline of 5.7%. The position briefly fell below 3.5 million shares in mid-October before rebuilding, so there is a rebuild underway rather than a sustained retreat. That said, borrow conditions are entirely relaxed. Availability runs at 5,338%, meaning there are roughly 53 shares available to lend for every one already borrowed. Cost to borrow is 0.46%, essentially the floor rate. With the lending market this loose, short sellers face no squeeze pressure whatsoever, and the ORTEX short score of 42.8 sits in the bottom third of the universe, ranking in the 30th percentile.

The Street is cautious but not pessimistic. Barclays holds an Equal-Weight rating with a $35 price target, which now sits about 8% below the current price, a gap that widened after October's target cut from $37. Mizuho's last published move went the other way, lifting its neutral-equivalent target to $42 back in May. With a consensus mean target around $39.80, the implied upside from current levels is modest, roughly 4.5%. Valuation is undemanding: the stock trades at a price/earnings multiple of 13.8, up about 1 point over the past month, with EV/EBITDA near 8.9. The dividend score ranks in the 98th percentile across the ORTEX universe, reflecting AVA's income credentials. EPS surprise ranks at the 92nd percentile, meaning the company has a strong track record of beating estimates. Forward earnings momentum is weaker though, with the 12-month forward EPS growth score ranking in the 21st percentile, a reminder that this is a slow-growth regulated utility rather than a compounder.

One institutional footnote worth noting: BlackRock has been adding to its position, with its latest reported holding rising to 14.8 million shares, roughly 17.7% of shares outstanding. State Street also added 246,000 shares in the most recent quarter. ATLAS Infrastructure Partners disclosed a fresh 2.3 million share position. No activist 13D filers are on the register. Insider activity is thin and unremarkable, with only small equity awards to directors and a minor vice-president sale in September.

Retail attention is running well below Avista's own recent average, with Wikipedia page views putting the attention z-score at minus 2.1 against the past 90 days. For a quiet Pacific Northwest regulated utility, that is not surprising, but it does mean any uptick in coverage around the earnings print could be the next catalyst to watch. The next scheduled earnings event is pencilled in for late February 2027, leaving several months for the short rebuild and bullish options positioning to either resolve or intensify.