Bullish call buying has hit STERIS plc just as short sellers step up pressure. The put/call ratio collapsed to 0.87 on May 13 — a 2.65 standard-deviation drop below the 20-day average of 1.29. That contradicts a 21% weekly surge in short interest, setting up a rare two-sided tension.
The PCR drop is sharp and statistically extreme. One week ago, the ratio sat above 1.30. It has now fallen to 0.87 — the most bullish options positioning seen on the stock in months relative to its own recent baseline. The 52-week PCR range runs from 0.15 to 3.31, so there is room in either direction. But the speed of this move stands out. Options traders are buying calls aggressively, even as short sellers build positions in the stock lending market.
Short interest as a % of free float rose to 1.89%–1.91% over the past week — up roughly 21% in seven days. At under 2% of float, the absolute level is not alarming. But the pace of the increase is notable. Shares short climbed from around 1.51 million to 1.85 million in a single week. The cost to borrow also rose 50% week-on-week to 0.50%. Availability in the lending market remains ample — the borrow market is not tight — but short sellers are clearly adding exposure.
Keybanc's Brett Fishbin lowered his price target on STE from $291 to $269 on May 13 while keeping an Overweight rating. That trim may have prompted some of the repositioning. At $211, the stock trades roughly 21% below consensus target of $257.
Three data streams, two opposing conclusions. Short sellers increased positions by 21% in a week and cost to borrow hit its highest level since early April. Yet options traders simultaneously pivoted toward calls at the most aggressive rate in the stock's recent history. State Street added 465,231 shares in the most recent reporting period. Wellington Management added over 1.47 million. Institutional accumulation at the large-cap level continues.
The Keybanc target cut provides context: analysts still rate the stock a buy, but with more caution. The gap between where STE trades and where analysts see fair value is wide.
Data summary
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