JP Morgan cut its price target on MNSO by 38% — from $26 to $16 — last Thursday. The bank kept its Overweight rating. The target now sits just 18% above the current price of $13.53.
That target cut landed the same week MNSO fell nearly 9% on the month. The stock recovered 4.3% on June 1, but the broader trend remains negative.
The headline from the lending market is a reversal. Short interest fell 10.7% over the past week, to roughly 1.92 million shares. That's a 28.7% decline from a month ago. Whoever was pressing the short side has been covering.
Availability has also loosened from its most extreme levels. It now sits at 8.2% — still very tight, meaning only one share remains borrowable for roughly every twelve already lent out. But that compares to a low of just 0.09% in mid-May. The lending pool remains fully drawn, but at least new supply is trickling back in.
Cost to borrow is 5.8% — up 10% over the past month, but off recent highs.
The put/call ratio tells a more cautious story. The PCR stands at 0.57, running 1.72 standard deviations above its 20-day average of 0.49. That's elevated put buying relative to recent norms. The 52-week PCR high is 0.70, so sentiment is moving in that direction without hitting extremes yet.
The May 26 earnings print — which sent the stock down 7.8% on the day — appears to be the catalyst that reset market positioning. Shorts covered. But options traders are still reaching for downside protection.
The divergence between short covering and elevated put buying is the tension to watch. Shorts are stepping back. Options traders are not convinced the selling is done.
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