MLCO Surges 12% Into Earnings With Options Traders Leaning Bullish

Melco Resorts & Entertainment heads into its Q3 results with the stock up 12% on the week and options traders showing one of their most bullish postures of the past year.

The options signal is striking. The put/call ratio has collapsed to 0.14, nearly at its 52-week low of 0.14, and well below the 20-day average of 0.15. That is a sharp reversal from late September and early October, when the PCR was running above 0.30, reflecting heavy demand for downside protection. The drift lower in the PCR through October mirrors the stock's recovery, and the current reading is the most call-skewed in at least a year. Options traders are positioned for the upside, not hedging against a miss.

The lending market adds no friction to that picture. Borrow availability is loose at 526%, meaning there are more than five shares available to lend for every share already borrowed. Cost to borrow has fallen around 37% over the past month to just 0.40%, near its lowest level in the period. Short interest itself is modest at 1.6% of the free float, up roughly 27% over the past month in share terms but still a low absolute level. The ORTEX short score of 45 sits in the middle of the range, consistent with limited short conviction. Nothing in the lending market suggests a crowded bear trade.

The Street is more cautious than the options market implies. Analyst activity since mid-year has been a one-way ratchet of target cuts. JP Morgan moved to Neutral in January 2026, then trimmed the target again in July to $5.70. Morgan Stanley downgraded to Equal-Weight in June. Susquehanna, maintaining a Positive rating, cut its target twice in August alone, most recently to $7.00. The mean price target now sits at $6.18, implying roughly 47% upside from the $4.20 close, but that gap reflects how far the stock has fallen rather than fresh Street enthusiasm. The most recent analyst changes are now more than two months old, so caution is warranted in reading too much into the current consensus shape. Valuation is not demanding: the stock trades at around 7.3 times earnings and 6.2 times EV/EBITDA, with the earnings yield factor ranking in the 95th percentile of the universe, a signal the stock screens as cheap.

Ownership concentration is the other fact worth carrying. Melco International Development Limited, the controlling parent, filed a Schedule 13D/A in October disclosing a stake that climbed from 56.3% to 62.6% of the class. That is an activist-flagged filing, though the context here is a parent consolidating control rather than an external agitator. As always with 13D/G disclosures, the stake is as-last-disclosed around the 5% threshold and positions can change without a further filing. Beyond the parent, ARGA Investment Management holds meaningful exposure across two vehicles, while BlackRock added over 1.4 million shares in the quarter to September. Insider activity in the recent window is limited to routine tax-withholding transactions and gift-code transfers from the CEO in September, neither category reflects discretionary conviction.

One additional data point adds texture this week: Wikipedia page views for Melco have spiked sharply, with the retail attention z-score reaching 2.6 as of late October, the highest reading in the tracked window. That kind of attention spike around an earnings catalyst is consistent with the surge in call-skewed options activity, suggesting retail interest has picked up alongside the stock's move.

The next earnings print is scheduled for November 5. With the stock having run 12% into the release, the prior two quarterly prints producing a flat day-one reaction followed by a 3% to 6% drift lower over five days, and options traders positioned well to the bullish side, the tension between near-term positioning and the recent pattern of post-earnings fades is the most important dynamic to watch when results land.