ECL heads into this week's trading with a notable disconnect: options traders have turned the most defensive they've been in months, yet short sellers remain largely absent — leaving the bearish pressure in derivatives rather than the lending market.
The clearest signal comes from options. The put/call ratio has jumped to 0.79, more than two standard deviations above its 20-day average of 0.65. That is the most defensive reading in at least several weeks and points to meaningful demand for downside protection. The shift has been sharp — just three weeks ago the PCR was tracking well below 0.60, reflecting a much more neutral posture. With the stock down 11% over the past month to $245.73 and off another 2.4% on the week, options traders appear to be hedging against further weakness.
Short interest tells a far less dramatic story. At just 1.05% of the free float, bears have not materially built positions — and borrow conditions offer no squeeze signal whatsoever. The cost to borrow is minimal at 0.47%, barely changed over the week, and availability is effectively unlimited. There is no pressure in the lending market. Short interest edged up roughly 2% on the week but remains near a six-week low in absolute share terms, having retreated from the ~1.1% levels seen in early May. The ORTEX short score of 29 confirms the setup: short positioning is well below any threshold that would make the borrow story interesting on its own.
The Street remains broadly constructive, though the gap between analyst targets and current price has widened dramatically. The mean price target of $316 implies roughly 29% upside from current levels — but that consensus has been under steady downward revision. Wells Fargo cut its target this week from $285 to $260 while holding an Equal-Weight rating, a notably cautious move. RBC Capital reiterated Outperform at $337 the same day, underlining the split. Citi trimmed its Buy target twice in recent weeks, moving from $345 to $325. BofA, by contrast, raised its target to $345 in late April. The direction of travel is mixed: bulls cite management's guidance for 100–150 basis points of annual margin expansion through 2030 and 25% digital revenue growth; bears flag sequential volume deceleration, EPS estimate cuts for 2026, and the risk that raw material costs or an economic slowdown erode the margin expansion story before it materialises. Valuation multiples have compressed alongside the price — the P/E has dropped roughly 3.6 points over the past month to around 27.7x, and EV/EBITDA has eased about half a point to 17.0x. Those moves reflect the selloff rather than any re-rating, and forward EPS growth still ranks in the 98th percentile, which keeps quality-oriented buyers engaged.
One institutional data point worth noting: JP Morgan Asset Management added 730,000 shares in the most recently reported period — the largest institutional addition in the top-15 holders. On the insider side, Lead Independent Director David MacLennan bought shares twice in May, picking up 1,800 shares in total near current levels. These are relatively modest purchases, but the pattern of buying into weakness carries some signal given the stock's proximity to recent multi-month lows.
The post-earnings record reinforces the cautious tone in options. The last two confirmed reports produced day-one declines of roughly 3.5% and 4.2%, with five-day moves also negative in both cases. The next scheduled report is July 28. Between now and then, the question is whether the price-action stabilises enough to reduce the hedging pressure visible in the put/call ratio, or whether the defensive options positioning proves prescient as volume growth and margin execution come into sharper focus.
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