BKH Shorts Surge 28% as Earnings Loom

Black Hills Corporation heads into its May 6 earnings call with short interest at a meaningful high, even as the stock itself has quietly outperformed — a tension worth watching.

Short sellers have been moving fast. SI % FF climbed to 12.5% of the free float, up 28% over the past month and nearly 12% on the week alone. The jump is concentrated: from early April, when shorts held around 7 million shares, positions ballooned past 9.4 million by late April. That kind of one-month acceleration is notable for a regulated utility. Yet the borrow market remains surprisingly uncrowded — the lending pool is still well-supplied, with availability far from the tight end of the range and cost to borrow running just 0.49% annualised, a relaxed level for a stock attracting this much new short interest. The ORTEX short score has ticked up to 59.9, near the top of its recent range, but is well below the 52-week maximum of 22% utilization the borrow market registered at its peak. The message: shorts are building, but borrow stress is not yet a feature of this trade.

Options traders, meanwhile, are positioned for the upside. The put/call ratio has dropped to 0.17, about one standard deviation below its 20-day average of 0.21 — one of the more call-heavy readings of the past year, against a 52-week PCR low of 0.03 and high of 0.76. That is the clearest divergence in the current setup: fresh short interest heading one way, options flow heading the other. The two signals are not necessarily contradictory — utility options markets are thin, and the call skew may simply reflect yield-chasing — but the gap is real.

The Street has been warming up to the stock ahead of next week's print. BMO Capital lifted its target to $91 from $84 on April 15, maintaining Outperform. B of A Securities raised its target to $76 from $72 on April 9, keeping a Neutral rating. Ladenburg Thalmann initiated with a Buy at $77 on April 1. The consensus mean target now rests at $83, implying roughly 10% upside to the current $75.24 close. The analyst rec differential factor scores in the 91st percentile — meaning BKH looks more bullishly covered than almost the entire universe. Forward EPS growth ranks in the 88th percentile. The dividend score, at the 97th percentile, reflects BKH's status as a Dividend Aristocrat candidate — though note the dividend history in the data runs only through 2022 and may not capture recent changes. Valuation is not stretched: the P/E has expanded about 1.3 points over the past month to roughly 17x, and EV/EBITDA has compressed modestly, to just over 10x.

Institutional ownership is dominated by passive flows, with BlackRock holding nearly 16% and Vanguard close to 12%. The standout among active investors is Point72, which disclosed a position of 1.875 million shares at year-end — a build of nearly 1.8 million shares in the period — though that data is now roughly four months old. The insider ledger is quieter, with the most recent trades from February: CEO Linden Evans received an award of 9,036 shares but sold 4,937 shares in the same period, a broadly neutral net. No insider has stepped in to buy with conviction.

Recent earnings reactions for BKH have been contained. The April 2 release produced a 2% next-day gain and nearly 6% over five days. The February 5 print moved the stock just under 2% in the opposite direction, with a five-day drift of less than 1%. Peers have tracked similarly this week — NWE and AVA both added around 2-3%, while NI and DTE rose 3-4%, so BKH's 2.4% weekly gain keeps pace with the sector rather than standing out.

With Q1 results due May 6, the key question is whether the short build reflects a specific fundamental concern or is simply sector-rotation hedging into earnings — particularly given the options market's stubbornly bullish tilt.