SBS, the São Paulo water utility known as SABESP, heads into its May 7 earnings report with options positioning firmly in bullish territory and short sellers backing away.
The clearest signal is in the options market. Call demand is overwhelming — the put/call ratio has collapsed to just 0.005, far below its 20-day average of 0.077. That makes the current reading among the most one-sidedly bullish of the past year, against a 52-week PCR range of 0.0 to 0.67. Options traders are not hedging into this print; they are expressing conviction on the upside.
Short sellers tell a consistent story. Borrowed shares have fallen roughly 13% over the past week to around 3.2 million, after briefly spiking above 4 million at the start of April. The borrowing cost is a negligible 0.54% annually, and borrow availability remains comfortable — nothing in the lending market suggests any pressure building against the stock. The ORTEX short score of 44, sitting comfortably in the middle of the 0-100 range, confirms that short-side interest is neither extreme nor escalating. Days to cover, at 2.3, leave no meaningful squeeze dynamic in play.
The institutional ownership picture is worth noting before the print. Wellington Management added more than 128 million shares in its most recently reported period — a substantial build for a fund of its profile. BlackRock also added nearly 9 million shares around the same time. The state of São Paulo remains the largest stakeholder with an 18% holding, alongside Equatorial S.A. at 15%, which means the free float available to institutional buyers is more limited than the headline share count suggests. On the analyst front, Jefferies initiated coverage in March with a Buy rating and a $36.60 target — close to the current price of $33.29. Most other analyst data in the system is too dated to be actionable.
The EPS surprise factor score ranks in the 87th percentile, meaning the company has a strong recent track record of beating estimates. The dividend score of 95 — near the top of the universe — points to a consistent payer, though the most recent US-listed dividend data is too old to be relied upon here. On valuation, the P/E of 14.8x and EV/EBITDA of 34.3x have both eased slightly over the past month, with the EV/EBITDA multiple compressing by roughly 3% in 30 days.
The May 7 print will test whether SABESP's ongoing privatisation-era operational improvements have translated into earnings momentum robust enough to justify the options market's unusually one-sided bullish lean.
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