BNS approaches its Q2 earnings release — confirmed for May 27 — with a quietly interesting contradiction: the stock has had one of its strongest months in recent memory while short sellers have been actively rebuilding positions.
The most striking data point this week is what happened to short interest on April 21. Shares short jumped from roughly 16.2 million to 21.2 million in a single step — a 31% increase in one week — lifting SI as a percentage of the free float from 1.3% to 1.7%. That is still a modest absolute level for a big-six Canadian bank, but the pace of the rebuild is worth noting. Short positions had been drifting sideways through most of March and early April before this abrupt move higher. The new level represents the heaviest short positioning in the trailing 30-day window.
The lending market tells a mixed story. Availability remains loose — the borrow is not remotely stressed, and utilization sits near 3.5%, a fraction of its 52-week high of 23.8%. Cost to borrow has ticked up about 26% on the week to 0.89%, but that follows a sharp spike to 15% on April 7 — almost certainly a tariff-shock dislocations day — and a subsequent collapse back toward 0.5%. The current level is unremarkable. In sum, while shorts have added to positions, they are not fighting for borrow and the lending market is not signalling any squeeze pressure ahead of May's print.
The Street is cautious rather than bearish. The analyst consensus registers a hold, with 10 hold ratings and 2 underperform — no active buy recommendations in the current data. That posture is consistent with where BNS trades: a PE of around 12.3x and a price-to-book of 1.59x, both drifting higher over the past month as the stock has climbed 11.5% to CAD 104.90. The dividend score ranks in the 96th percentile, flagging BNS as an income standout relative to peers. EPS momentum is softer — the 90-day reading sits in the 64th percentile, the 30-day in the 48th, suggesting forward earnings estimates are broadly flat rather than lifting.
Peer performance this week was mixed, with CM and BMO broadly flat to marginally negative on the week while RY added around 0.1%. BNS's 1.1% weekly gain was the strongest of the domestic group, despite the short interest rebuild — a sign that macro relief (Canadian bank stocks had been under pressure in early April) dominated over positioning headwinds. The April 14 earnings print reinforced that resilience: the stock moved 1.7% higher on the day and added another 2.1% over the following five sessions. The February print was softer, with a flat day-one reaction followed by a 3.4% slide over the week.
With Q2 results confirmed for May 27, the debate over the next four weeks will likely centre on Canadian mortgage credit quality, the pace of rate normalisation, and the degree to which BNS's Latin American franchise is generating or consuming capital in a still-uncertain macro environment. The short rebuild — modest in absolute terms but sharp in pace — suggests at least some investors are hedging into that print rather than running uncovered into a stock that has already recovered sharply.
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