First BanCorp. heads into its May 6 Q1 earnings call with a cleaner short book, a freshly upgraded rating, and options traders just starting to hedge — a setup that reads more constructive than cautious.
The short position has been unwinding steadily. SI as a percentage of the free float peaked near 6.4% in late March, then fell through April to 5.5% by April 28 — a meaningful reduction of roughly 0.9 percentage points in just over a month. Week-on-week, the estimated short count dropped nearly 9% in share terms. The lending market reflects no stress: the borrow market is loose, with cost to borrow running at just 0.67% annualised. There was a brief spike to 1.89% on April 21, but it lasted a single session before reverting. Availability is ample, with utilisation well below its 52-week high. Nothing here suggests short sellers are being squeezed or scrambling — they appear to be choosing to exit.
Options positioning tells a slightly different story heading into the May print. The put/call ratio jumped to 0.247 on April 29 — more than two and a half standard deviations above its 20-day average of 0.148. That is the most defensive options skew seen in several weeks. Notably, the prior quarterly print on April 22 produced a modest +1.2% next-day gain but reversed to -0.8% over the following five sessions. With the next result due in under a week, the options move looks like event hedging rather than structural pessimism — but it is worth noting the divergence from the short interest signal.
The Street's reaction to the last earnings was uniformly positive on target prices. Raymond James moved the boldest, upgrading FBP to Strong Buy and lifting its target to $27 on April 27 — the highest published target in the group and the only rating change in the batch. Several other firms — including Wells Fargo (Overweight, $26), Truist Securities (Buy, $26), and Keefe Bruyette & Woods (Market Perform, $26) — all raised targets on April 23 following the Q1 release. Only Piper Sandler held a Neutral rating, lifting its target to $25. The consensus is Buy, with a mean target of $25.67 against a current price of $23.84 — implying roughly 8% upside. The P/E has re-rated to 10.4x and P/B to 1.73x, both up about 7-8% over the past 30 days as the stock climbed 14% in a month. The bulls point to stable credit, expanding net interest margins, and sustained federal reconstruction spending in Puerto Rico. The bears flag upward pressure on operating expenses and potential OREO asset losses as offsets.
Factor scores support the constructive read. EPS momentum ranks in the 83rd percentile over 30 days, and the dividend score is in the 86th percentile. EPS surprise is in the 74th percentile — FBP has a track record of beating estimates. The ORTEX short score has drifted lower over the past two weeks, from above 46 to 44.2, consistent with the declining short position. Against peers, the picture is similar: closest correlated name BPOP (87.5% correlation) lost ground on the week while FBP managed a modest 0.72% gain, though both pulled back on Wednesday.
The insider cluster from March 20 — when the CEO, CFO, and seven other executives all sold at $20.57 — is worth contextualising. Those sales now sit roughly 16% below the current price, and all were flagged at minimum significance. The pattern looks more like routine vesting-related disposal than a directional signal, particularly given the stock's subsequent performance.
With Q1 results confirmed for May 6, what matters most is whether net interest margin expansion holds and whether credit quality remains clean — the two pillars underpinning every recent target upgrade.
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