Adient reported Q2 fiscal 2026 earnings on May 6, landing into a market where six weeks of short covering have materially changed the positioning picture.
Short sellers have been in steady retreat. Short interest as a percentage of free float has dropped from a March peak around 7.4% to 5.7% — a nearly two-percentage-point unwind in roughly six weeks. The sharpest step-down came around April 23, when shorts fell from over 6.2% to 5.7% in a single session, a move that aligned with Citigroup's upgrade earlier that week. The selldown has continued at a slower pace since, and the most recent reading at 5.7% is the lowest level in the 30-day window. At this rate of retreat, the short base is still meaningful but the momentum is clearly in the wrong direction for bears.
The lending market corroborates the lack of urgency to be short. Borrow cost has eased nearly 20% over the past week to 0.39% annualised — exceptionally cheap, indicative of a stock where the short trade carries almost no financial penalty. Availability has been consistently loose throughout the period. Options positioning echoes the same message: the put/call ratio is running at 0.11, well below its 20-day average of 0.17 and near the 52-week low of 0.08. That's an unusually call-heavy skew, suggesting options traders have been positioning for upside rather than hedging against downside. None of these instruments are flashing stress.
The Street is split but leaning constructive. Citigroup upgraded ADNT to Buy on April 15, lifting the target to $33 — the most bullish recent move. JPMorgan held its Neutral rating but trimmed its target from $28 to $26 on April 23, a cautionary signal from a bellwether firm even as others maintained positive stances. Wells Fargo (Overweight, $28) and Stifel (Buy, $26) both kept their ratings intact despite trimming targets earlier in April. The consensus sits at Hold with a mean target around $31 — roughly 50% above the current $20.67 price. That gap warrants a note of caution: the Street's collective view embeds meaningful recovery that the stock's current level does not yet reflect. Valuation multiples remain compressed — an EV/EBITDA of around 4.1x and a P/E near 8.4x both sit well below typical automotive parts peers. The bull case rests on margin expansion toward 5–5.5% and share gains from onshored production; the bear case centres on legacy loss-making metals contracts, weak EMEA production volumes, and persistent macro headwinds.
The earnings reaction data offers context here. In February, ADNT posted results that drove a 19.7% single-day gain and a 26.6% five-day follow-through — the largest recent move in either direction and a signal that when the company delivers, the market response can be sharp given how low expectations are set. Today's Q2 print landed after market close, and the positioning into it — call-skewed options, declining short interest, cheap borrow — looked optimistic rather than cautious.
Peer performance over the week reinforces that the broader auto parts space has bounced. LEA gained 6% on the week, SMP was up 4%, and PHIN added nearly 5%. GTX was a notable outlier, surging 29% over the same period. Against that backdrop, ADNT's 2.4% weekly decline looks like underperformance — making the post-earnings market reaction the key data point to watch in the sessions ahead.
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