APA Corporation heads into the week with a notable contradiction: short sellers are adding positions at the fastest pace in months, yet options traders are the least bearish they have been all year.
The short interest story is the most pressing tension in the data. Shorts climbed 7.3% over the week to 7.85% of the free float — around 27.8 million shares — the highest level in at least 30 days. The build is not a one-day spike; the trend has been grinding higher for six weeks, with SI up nearly 12% over the past month. That said, the borrow market offers no amplification. Cost to borrow is just 0.44%, barely changed on the week. Availability is running at 675% — meaning roughly nine shares are available to lend for every two currently borrowed — well within the normal range and far below the 52-week tightest reading of 217%. There is no mechanical pressure on the shorts here. The accumulation looks deliberate, not reactive.
Options tell a sharply different story. The put/call ratio dropped to 0.46 on Tuesday — close to the 52-week low of 0.44 — and nearly 1.5 standard deviations below its 20-day average of 0.50. That is an unusually call-heavy skew, and it arrived just as the stock slid 3.2% on the week to $36.61. Calls dominating a falling tape is a classic divergence: either a cohort of buyers sees the dip as a buying opportunity, or hedged long holders are selling puts. Either way, options positioning looks conspicuously unbothered by the short buildup.
The analyst community has broadly raised targets in recent weeks, even without changing ratings. Barclays lifted its target from $35 to $41, Citi moved from $40 to $44, and Raymond James bumped from $45 to $57 — all while keeping existing ratings. Morgan Stanley, which carries an Underweight, also nudged its target up to $44. The pattern is a Street that sees modestly higher intrinsic value but is not pulling the trigger on conviction upgrades. The consensus is a Hold with five buys against sixteen holds and no current sell ratings beyond the Mizuho and Morgan Stanley underweights. The bull case rests on Egyptian acreage expansion and operational efficiency gains; bears point to reduced capex of $2.5 billion and execution risk in Suriname and the Permian. Valuation looks undemanding — PE near 6.6x and EV/EBITDA at 2.96x — though both multiples have drifted lower over the past 30 days. The dividend score ranks in the 92nd percentile, and EV/EBIT places in the 86th, but the short score rank of 20 out of 100 reflects the building bear positioning.
Earnings history adds a layer of caution to the calendar. The last three prints all produced negative day-one reactions: -1.3%, -7.2%, and -12.6% respectively. The five-day windows fared no better, with the worst stretching to -10.9%. The next earnings event is scheduled for August 6 — eight weeks out — which is long enough that the current short build is unlikely to be a pure earnings-hedging play. Peers have also sold off in sympathy this week: MTDR fell 4.1%, OVV dropped 3.3%, and CHRD gave back 2.8%, suggesting broad E&P sector pressure rather than APA-specific news driving the tape.
Positioning into August looks bifurcated: shorts are adding into what they see as a value trap, while call buyers are fading the same decline — with the borrow market comfortably loose, the resolution of that disagreement is unlikely to come from a squeeze and is more likely to hinge on the next commodity price move or an operational update before the Q2 print.
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