Medline Inc. heads into its June 11 earnings date with short interest at a new high, the stock down sharply on the month, and a Street that remains broadly bullish but increasingly cautious on near-term execution.
The short rebuild that has been running since early May accelerated hard this week. Estimated short interest hit 33.4 million shares by May 26 — up 26% on the week and 38% higher than a month ago. That pace is faster than anything seen in the prior note, which flagged 26.7 million shares as a "new recent high." The ORTEX short score has moved with it, climbing from 54.5 on May 19 to 62.3 by May 26 — a meaningful step higher into genuinely elevated territory. The prior article noted the rebuild looked like a conviction trade rather than a squeeze. That read has only grown stronger. The important distinction this week is what the borrow market is now doing in response. Availability has tightened sharply — falling from around 344% of short interest a week ago to 195% now, a 43% drop over the week. That is still well within the comfortable range (anything above 100% means more shares are available than are currently borrowed), so there is no squeeze dynamic. But the direction is notable: as the short position expands, the lending pool is no longer expanding with it. The spread is narrowing. Cost to borrow, at 0.54%, remains near its lowest readings of the past month and is barely moved.
Options positioning tells a different story from the short side. The put/call ratio is running at 0.49, almost exactly in line with its 20-day average of 0.48 and well below its 52-week high of 1.97. There is no unusual demand for downside protection in the options market — the z-score is essentially flat at 0.11. Shorts are building a meaningful position; options traders are not especially concerned. That divergence was flagged last week and has not resolved.
The analyst community is broadly onside but has been trimming expectations. The consensus is a strong buy, with 17 buys against just 4 holds and a mean price target of $51.78 — a significant premium to the current $36.16 close. The most recent actions, both from mid-May, split the message: BNP Paribas cut its target from $49 to $40 while keeping a Neutral rating, while Tigress Financial nudged its Buy target up from $60 to $62. Earlier post-earnings moves from Citi and Bernstein both trimmed targets but held positive ratings, a pattern that suggests the Street still believes in the medium-term thesis while acknowledging near-term margin pressure. The PE multiple has compressed by roughly 6.6 points over the past 30 days — the stock is getting cheaper as the price falls, but that reflects the selloff rather than a re-rating of underlying earnings.
The institutional ownership picture adds context to the short buildup. Carlyle and Hellman & Friedman — two of the three largest shareholders, collectively holding more than 32% of shares — were both active sellers in March, offloading tens of millions of shares at prices around $40–$41. The stock has since fallen to $36. Fidelity (FMR) and Capital Research have been moving in the other direction, each adding more than 9 million shares in the most recent reported period. That split — PE sponsors reducing, active managers adding — is a backdrop worth watching as the short interest continues to climb.
Earnings history adds a cautionary note. The two most recent prints produced a one-day decline of roughly 6–8% and a five-day decline of 13–15% each time. The next release is June 11. With short interest at a four-week high and the stock already down 19% over the past month, the setup into that date is where the attention belongs.
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