RIG enters its Q1 2026 earnings release with one of the most crowded short positions in the drilling sector — and bears have been adding into the event.
Short interest has climbed to 22.1% of the free float, up from around 18.9% in late March. That's a roughly 17% increase in short positioning over six weeks, driven by a clear step-change after April 10 when bears added aggressively. The ORTEX short score has reached 65.6, its highest reading of the past two weeks. Borrow costs remain low at 0.47% — shorts are not under pressure to cover — and availability is not a constraint, with ample lending supply still in the market.
Options positioning tells a more neutral story, which itself is notable given the scale of short interest. The put/call ratio is running at 0.62, almost exactly in line with its 20-day average of 0.63 and well below the 52-week high of 0.70. Options traders are neither hedging hard nor leaning bullish — the market is simply not expressing a strong directional view through derivatives heading into the print.
The analyst community has been quietly more constructive. Morgan Stanley raised its target to $7.00 on April 15, though it kept its Equal-Weight rating. Susquehanna lifted its target to $8.00 in early April, maintaining a Positive view. Both moves came after the stock was trading meaningfully below those levels. The mean analyst target sits near $6.02 against a current price of $6.88, suggesting the stock has actually moved ahead of the Street's central case. The insider picture adds a layer of caution: in early March, five executives including the CEO, CFO, and Executive Chairman collectively sold more than $3.6 million worth of stock at prices around $6.12 — levels the stock has since surpassed.
Institutional holders including Vanguard, BlackRock, and Dimensional all added to positions in the most recent quarter, providing some counterweight to the short-side pressure. Closest peer VAL surged 12% on the week compared to RIG's 5.5%, while NOV and FET fell sharply — a split that highlights how differentiated the offshore drilling subsector has become. The Q1 print will test whether RIG's operational leverage to deepwater day rates is enough to justify a stock that has now outrun the average analyst's target price.
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