Mueller Water Products heads into its Q2 2026 earnings call on May 6 with options traders signalling unusual optimism — a notable contrast to the cautious positioning that has characterised recent months.
The clearest signal heading into today's print is in options. The put/call ratio has collapsed to 0.12, roughly 1.4 standard deviations below its 20-day mean of 0.31. That makes this one of the most call-heavy readings of the past year. The shift is sharp and recent: as late as late April, the PCR was running near 0.49, implying meaningful hedging demand. That demand evaporated fast, replaced by call-side positioning into the release.
Short interest argues there is no meaningful bear thesis building in the background. SI has fallen 13% over the past month to 2.2% of the free float — a modest and shrinking position. Borrow availability is exceptionally loose, and the cost to borrow, while it has more than doubled over the past month to 0.59%, remains well below levels that would suggest any squeeze dynamics. Short sellers are not pressing this into earnings.
On fundamentals, bulls have a reasonable hand to play. The most recent quarter showed 4.6% year-on-year revenue growth, a 22.7% EBITDA margin, and the company is effectively net-debt neutral — with $459.6 million in cash against $452.3 million in debt. The EV/EBITDA multiple has drifted down slightly over the past month, sitting near 11.8x, which is a modest re-rating given the operating quality. Oppenheimer reiterated an Outperform rating after the February print and lifted its target to $32, consistent with where the stock was then trading. The analyst consensus target is $31.60, against a current price of $27.55, implying roughly 15% upside — though all recent analyst actions date to February or earlier, so the Street's read has not been updated into this quarter. The prior two earnings prints both saw positive reactions: the stock rose 0.9% in the session after February's Q1 and 6.0% after the preceding quarter, with five-day follow-through of 3.3% and 8.7% respectively.
The most notable institutional move in the most recent filing period was First Trust Advisors adding approximately 3.4 million shares — a position increase of meaningful size relative to its existing stake. BlackRock also added nearly 912,000 shares. Net insider activity over the past 90 days has been marginally positive in share terms, though the individual trades were small in absolute value and largely routine.
Today's print is therefore less about whether Mueller Water can grow revenues and more about whether the company can sustain and expand margins in a period where input costs remain a live variable — and whether the call-heavy options positioning reflects genuine conviction or simply the absence of bearish hedgers.
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