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Has Shell’s Short Interest Risen before Its Earnings?

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Short interest in Shell

The short interest in Royal Dutch Shell (RDS.A) expressed as a percentage of outstanding shares has risen from 0.10% on September 14 to the current level of 0.12%. Usually, everything else being equal, a rise in the short interest could indicate an increase in the bearish sentiment for a stock. However, Shell’s stock price has risen 1.2% during this period.

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Peers’ short interest

The short interest in BP (BP), Total (TOT), and Equinor (EQNR) has risen by 0.05 percentage points, 0.01 percentage points, and 0.01 percentage points, respectively, since September 14. Currently, BP, Total, and Equinor have short interests at 0.21%, 0.09%, and 0.21%, respectively.

If we consider their stock prices, BP and Equinor stocks have risen 3.0% and 1.7%, respectively, while Total stock has fallen 1.7%.

Series overview

In this series, we discussed that Wall Street analysts expect Shell to post strong third-quarter earnings. The earnings are scheduled to be released on November 1. Analysts expect the earnings to touch a three-year high in the third quarter. The increase would mainly be supported by strong upstream earnings and higher oil prices.

Since Shell’s recent loss, the stock has risen marginally in the past month. Many analysts have assigned “buy” ratings to Shell ahead of its earnings due to better growth prospects and improving financials. Shell’s dividend payment in the fourth quarter is expected to be stable. However, the short interest in Shell has risen marginally ahead of its third-quarter earnings.

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