Options traders have shifted decisively to the bullish side heading into LUMN's May 20 earnings, even as analyst targets trail the stock's recent run.
The clearest positioning signal is in options. The put/call ratio has dropped to 0.66 — nearly two standard deviations below its 20-day average of 0.84 — placing it close to the most call-heavy reading of the past year. That reflects genuine conviction in continued upside, not just hedging noise. The move follows a sharp price run: LUMN has gained 29% over the past month and 18.5% over the past week alone, closing at $10.05 on Friday. The lending market adds no pressure to that story. Availability is wide, borrow costs sit at just 0.35% — well off their intra-month peak near 0.49% — and short interest has eased modestly to 5.6% of the float, roughly flat over the past month. Nothing in the borrow market suggests forced covering or a squeeze setup.
The tension going into the print is a straightforward one: the stock has moved well past where the Street is willing to follow. Multiple analysts raised targets in the week ahead of the report — JP Morgan to $7.00, Wells Fargo to $9.00, UBS to $8.00, TD Cowen to $9.00 — yet the consensus mean sits at $8.29, more than 17% below where the stock is trading now. That gap is unusual and meaningful. Bulls point to Lumen's strategic pivot toward enterprise networking and its Alkira acquisition as catalysts for revenue inflection after years of decline. Bears counter that the transformation is still unproven, revenue has been shrinking, and the company carries a heavy debt load — the EV/EBITDA multiple has drifted up to 8.7x as the price has rallied. The EPS surprise rank is strong at the 88th percentile, suggesting the company has consistently cleared the bar on reported numbers, but the debate is less about the quarter itself and more about whether the trajectory justifies a $10 stock.
One contextual note on insiders: the most recent cluster of reported activity, from late February, was net selling — CEO Kate Johnson sold $12.2 million worth of shares and CFO Chris Stansbury sold $5.9 million, both at $7.11. That activity predates the current rally by a significant margin, and Johnson did purchase roughly $500,000 worth at $6.35 earlier in February. The insider picture is therefore mixed rather than directional, and it is now several months old.
The May 20 print tests a specific proposition: whether Lumen's enterprise transition has reached the pace needed to justify a stock that has now moved 57% above the average analyst target.
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