Cabot Corporation heads into its May 4 Q2 results with short sellers adding positions at the fastest pace in months and options traders swinging decisively bullish — a direct conflict that makes this week's setup worth watching.
The most notable development is the steady accumulation of short positions. Short interest has climbed 15% over the past month to 5.7% of the free float, with the bulk of that move coming in the last week alone — a 7.7% rise over seven sessions. The ORTEX short score has ticked up in parallel, reaching 49.5 from around 47 just two weeks ago. Days to cover is approaching 9.6 days, based on the most recent FINRA settlement. That's not a crowded short by any measure, but the direction of travel is unambiguous: shorts have been rebuilding steadily through April.
Borrow conditions remain almost entirely unobstructed, however. Availability is ample — shares to borrow are plentiful relative to the existing short interest. Cost to borrow has drifted up about 16% week-on-week to 0.45% annualised, but that absolute level is still near zero. There is no squeeze pressure here; the cost of being short is negligible. The short build is a deliberate positioning choice, not a reluctant one.
Options tell the opposite story. The put/call ratio has collapsed to 0.28, nearly 1.5 standard deviations below its 20-day mean of 0.40 — the most call-heavy the options market has been in recent weeks. The shift is abrupt: as recently as mid-April the PCR was running close to 0.48. That flip coincides almost exactly with the tariff-driven volatility truce and the stock's recovery from lows. Call buyers appear to be positioning for the earnings catalyst. The contrast between rising short interest and a bullish options skew is the defining tension of this setup.
The Street provides little resolution. Analyst coverage has been mixed and mostly stale — the most recent changes date to early February, when UBS lifted its target to $81 (Neutral) after earnings while Mizuho simultaneously downgraded to Neutral with a $75 target, cutting from an Outperform. The mean price target of roughly $77.80 sits almost exactly at the current $76.86 close, offering no directional signal. The EV/EBITDA multiple is near 7x, undemanding for a specialty chemicals business, and the EV/EBIT lands at about 9x. The dividend score ranks in the 100th percentile, reflecting a reliable payout history. EPS momentum over 90 days ranks in the 26th percentile, though the 30-day figure is back to the mid-range at 51 — suggesting some stabilisation in forward estimates. The stock is up about 1.1% on the week and 3.7% over the past month, broadly outperforming several close peers: AVNT fell 3.2% on the week and FUL dropped 2.1%, while OEC edged 2.2% higher in line with CBT.
The last two confirmed earnings prints both produced meaningful positive reactions — the February release drove an 8% jump on day one and held most of that gain over the following week. The March event was more muted, with a 2.6% day-one move. With the Q2 print now just days away, the active argument between short rebuilders and call buyers will resolve quickly.
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