Three bearish signals converged on PCAR this week. Short interest climbed, borrowing costs jumped, and options traders rushed to buy puts. The moves follow a -7.1% stock reaction to last week's earnings.
The sharpest signal came from the options market. PCAR's put-call ratio hit 0.534 on April 29. That sits 2.68 standard deviations above its 20-day mean of 0.44. Traders haven't leaned this hard on puts in the recent window. The move followed a 1.2% daily decline and a 5.7% weekly slide.
SI rose 11.2% over the past week to 2.43% of free float. That's up 14.3% over the past month. At 2.43%, the absolute level is modest. But the rate of change is what stands out — 12.8 million shares short as of April 28, the highest in the recent window.
Days to cover stand at 4.94, based on the latest FINRA fortnightly data.
Cost to borrow jumped 55% in a week to 0.50%. That's the highest reading in the 30-day history. The borrow market is tightening alongside the rise in short demand. Availability remains adequate for now — the low utilization level suggests plenty of shares still in the lending pool — but the directional move in CTB warrants watching.
JP Morgan's Tami Zakaria cut her price target to $140 from $150 on April 29. She kept her Overweight rating. Wells Fargo raised its target to $125 from $119. Truist lifted its Hold target to $126 from $120. The consensus mean sits at $128.20, against a current price of $118.14 — implying roughly 8.5% upside to the average target.
The earnings reaction told its own story. PCAR fell 7.1% on April 28. Bear case concerns centre on a 33% drop in North American truck deliveries and operating margin compression to 7.8%.
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