Service Corporation International enters the week of May 6 nursing an 8% decline — its worst weekly move in recent memory — after an earnings report that sent the stock down more than 6% in a single session, and options traders are now more defensive than they've been all year.
The clearest signal this week is in options. The put/call ratio jumped to 0.45, more than two standard deviations above its 20-day average of 0.33 — the most elevated defensive skew of the past year. That shift is sharp and recent: as late as April 24, the PCR sat at 0.27, near its 52-week low. In less than two weeks it has swung to the high end of its annual range, pointing to a meaningful uptick in demand for downside protection following the earnings release.
The earnings reaction itself underscores why. SCI reported on April 29–30, and the stock fell roughly 6–8% on the news — a significant print given the company's usual reputation as a low-volatility, defensive name. The move wiped out months of relative stability, with the stock closing at $79.49 on May 5, down 6.2% over the past month and now sitting almost $17 below the Street's mean price target of $96.
Short interest, by contrast, tells a less alarming story. At 4.5% of the free float, SI is modest and has barely moved on the week — down about 1.7% day-over-day and 1.7% week-over-week. The borrow market is extremely loose: availability runs at roughly 906% of short interest, meaning there is an enormous pool of shares still available to lend relative to what's already been borrowed. Cost to borrow is just 0.48%, essentially general collateral. Short sellers are not crowded here, and the lending market carries no squeeze pressure whatsoever. The short score of 44 is mid-range and has actually been declining since a brief spike to 47 in late April, consistent with shorts trimming rather than building after the earnings sell-off.
The Street took notice of the weak quarter but stayed broadly constructive. Both UBS and JP Morgan moved on May 1 — the most recent activity from bellwether names — each maintaining their positive ratings while cutting targets. UBS kept its Buy and trimmed to $93 from $95; JP Morgan held Overweight but dropped to $100 from $110, the larger of the two moves. That leaves the mean target at $96, implying roughly 21% upside to the current price. Oppenheimer had actually raised its target to $97 in early April ahead of the print, and that optimism now looks premature. Bulls can point to pre-need cemetery sales growth and improving revenue per funeral service; bears flag execution risk on FTC regulatory changes to the Funeral Rule and the modest long-run EPS CAGR that characterised the prior decade. The dividend score ranks in the 100th percentile — SCI has a strong payout history — though the most recent dividend data in the snapshot is stale (last confirmed payment in 2022), so that ranking should be treated with some caution.
Institutional ownership remains stable and concentrated. BlackRock added over 1.27 million shares in the most recent reporting period, bringing its stake to 10.2% of shares outstanding — the largest holder. T. Rowe Price made a notably larger addition, adding roughly 2.7 million shares to reach 3.8% of the float. Insider activity through March was light but entirely one-directional: the CFO, COO, President, and several SVPs all sold small parcels on March 5, most likely routine plan sales given the low significance scores. Nothing in the insider register points to a strategic signal.
The closest listed US peer, CSV (Carriage Services), fell 5.5% on the week — broadly in line with SCI's move — suggesting the weakness reflects sector-level pressure rather than idiosyncratic SCI risk. With next earnings not scheduled until July 29, the near-term debate will centre on whether the post-print de-rating is finished, or whether the persistent gap between the current price and analyst targets gradually closes through stock recovery or target cuts.
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