Four major banks raised price targets on KGS this week. The cost to borrow doubled overnight. Short interest keeps falling. These three signals point in the same direction — and they're worth examining together.
Barclays, RBC Capital, Goldman Sachs, and Citigroup all raised targets on Kodiak Gas Services within the past week. Barclays lifted its target from $60 to $76 yesterday, maintaining Overweight. RBC went from $64 to $84, Goldman from $69 to $88, and Citi from $63 to $86 — all keeping their respective Buy/Outperform ratings intact. The mean target now sits at $80.67 against a close of $72.39. That implies roughly 11% upside even after a 14% one-month rally.
This is not a single analyst revising — it's a coordinated post-earnings re-rating. KGS beat Q1 estimates on May 11 and jumped nearly 8% that day. The sellside is now catching up.
SI has now fallen to 5.82% of the free float. That's down from above 7% in late April and continues the retreat first noted after the Q1 earnings beat. The covering has been steady and orderly — shorts built through April, got wrong-footed by the print, and have been unwinding since.
Borrow availability remains extremely loose. At 9,999% — the practical ceiling of the metric — there are roughly 99 million shares available to borrow against fewer than 5 million currently shorted. The lending pool is essentially unconstrained.
Here's where it gets interesting. Despite that abundant availability, the cost to borrow more than doubled in a single session — jumping from 0.55% on May 20 to 1.12% yesterday. Over the past month, CTB is up 184%.
A CTB spike alongside rising availability is unusual. It suggests the increase may reflect repricing mechanics or specific demand rather than a broad tightening of the lending pool. The borrow market is not tight by any standard measure — 9,999% availability means the lending pool is far from strained. Watch whether CTB normalises in coming sessions or whether it continues climbing despite the ample supply.
The options picture has normalised from the sharp dislocation flagged last week. The put/call ratio on May 15 hit 0.722, which was 2.3 standard deviations below the 20-day mean — heavily call-skewed. As of May 21, the PCR has drifted back to 0.891, close to the 20-day average of 0.902. The spike appears to have been a positioning event tied to the post-earnings momentum rather than a sustained structural shift.
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