Constellation Brands is sending mixed signals. Call buyers dominate the options market. Yet short sellers have been quietly building positions over the past month.
On May 15, the put/call ratio hit 0.75 — 2.6 standard deviations below its 20-day mean. That was the most call-skewed reading since late April. The ratio has since normalised to 0.81, close to its 20-day average of 0.81, but the options market remains tilted bullish overall.
The timing matters. STZ posted strong earnings reactions in April — a 10.6% one-day move on April 9, followed by a further 6% gain the next session. Next earnings arrive June 26. Options positioning ahead of that date may explain some of the call demand.
Short interest rose sharply earlier in May. It peaked near 7.3 million shares around May 12, representing roughly 4.2% of float. Since then it has eased back. The latest reading is 6.77 million shares, or 3.89% of float — still up about 5% versus a month ago.
That level is moderate but notable. It sits at the highest point since late April and suggests a cohort of bears hasn't been shaken out despite the stock's 7.3% bounce over the past week.
Cost to borrow jumped 60% over the past week to 0.40%. That is a meaningful move in percentage terms. In absolute terms, 0.40% remains very cheap. Availability stands at roughly 2,445% — meaning the lending pool holds around 24 times more shares than are currently borrowed. The borrow market is not tight by any measure.
The CTB uptick likely reflects the increase in short demand over recent weeks rather than any supply squeeze. Bears can still get access easily.
The most significant recent analyst action was TD Cowen's upgrade on April 13. Robert Moskow moved STZ from Hold to Buy and raised his target from $142 to $190. That followed a wave of target-price lifts from Barclays, BofA, Deutsche Bank, UBS, Morgan Stanley, Wells Fargo, Evercore and Piper Sandler on April 10 — all responding to the post-earnings beat.
Consensus sits at Buy. The mean price target is $177.55. At the current price of $150.83, that implies roughly 18% upside to the average estimate.
What to watch: Whether short interest continues its gentle decline heading into June earnings, or whether bears re-engage if the stock stalls near the $155–$160 resistance zone.
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