Short interest across the European airline sector has risen over the past month, according to Citi, with the shift most pronounced at International Consolidated Airlines Group SA (LSE:IAG).
The bank's quantitative team tracks long and short positioning across its coverage, and found positioning turned more negative month on month for every name except easyJet.
IAG saw the sharpest reversal, moving from a consensus long to a consensus short following its results.
Citi described that as surprising, given the overall reaction to the numbers felt reasonably relaxed despite a miss on revenue.
Ryanair Holdings PLC (LSE:RYA) is now the only stock in the coverage sitting outside the consensus short quadrant, although Citi still characterises it as a two-way debate, with short crowding building both week on week and month on month.
Wizz Air Holdings PLC (AIM:WIZZ) remains the most crowded short in the sector.
EasyJet is the exception to the monthly trend, with short crowding lower over the month, though it did tick up over the past week.
Air France-KLM (OTC:AFLYY) stays in consensus short territory, but the position has been trimmed after what Citi called a solid set of results.
The bank flagged Lufthansa as the one to watch, having reported soft numbers, with positioning yet to reflect the update.
Positioning data of this kind measures how heavily hedge funds and other investors are betting against a stock relative to its history and its peers, and a crowded short can amplify moves in either direction.
Heavy short interest leaves a stock vulnerable to a sharp rally if news improves, since investors are forced to buy back shares to close their positions.
