ODP Corp. (ODP) ended its most recent trading session at $28.75, a slight increase of 0.49% from the previous day’s close. This performance exceeded the S&P 500’s daily gain of 0.4%. The Dow Jones Industrial Average also saw an upswing of 0.62%, while the tech-heavy Nasdaq gained 0.6%.
However, over the past month, ODP Corp. shares have dipped 3.86%, trailing behind both the Retail-Wholesale sector’s gain of 5.71% and the broader S&P 500’s gain of 1.71%. This recent performance suggests that investors may be holding back their enthusiasm for the office supply retailer.
The upcoming earnings disclosure will be a key factor for investors to watch closely. Analysts expect ODP Corp. to report earnings of $1.49 per share, representing a 20.74% decrease from the same period last year. Revenue is projected to reach $1.83 billion, a 9.13% decline year-over-year.
For the entire year, the Zacks Consensus Estimates anticipate earnings of $4.29 per share and revenue of $7.13 billion, reflecting drops of 23.39% and 8.96%, respectively, from the previous year. These projections indicate continued headwinds for the company.
In addition to the earnings announcement, investors should pay close attention to any shifts in analyst estimates for ODP Corp. These changes often reflect evolving near-term business trends. Positive revisions in estimates are usually a positive sign for the company’s future outlook. Zacks Research has shown that these estimate changes are directly correlated with near-term stock price movements.
To help investors capitalize on these insights, Zacks has developed the Zacks Rank, a unique model that incorporates estimate changes and provides a practical rating system. The Zacks Rank, ranging from #1 (Strong Buy) to #5 (Strong Sell), boasts a remarkable and audited track record of success. Stocks ranked #1 have historically delivered an average annual return of +25% since 1988.
Over the past 30 days, the Zacks Consensus EPS estimate for ODP Corp. has remained unchanged. Currently, the company holds a Zacks Rank of #3 (Hold). This neutral ranking suggests a cautious stance towards the stock’s immediate prospects.
In terms of valuation, ODP Corp. currently trades at a forward P/E ratio of 6.68. This represents a discount compared to the average forward P/E of 14.34 within its industry. The company also has a PEG ratio of 0.48. This metric is similar to the P/E ratio but takes into account the company’s anticipated earnings growth rate. At the end of yesterday’s trading, the Retail – Miscellaneous industry had an average PEG ratio of 2.3.
The Retail – Miscellaneous industry, part of the broader Retail-Wholesale sector, holds a Zacks Industry Rank of 167. This places it in the bottom 34% of all 250+ industries. The Zacks Industry Rank is ordered from best to worst based on the average Zacks Rank of individual companies within each sector. Zacks research suggests that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Investors will be closely monitoring ODP Corp.’s upcoming earnings report to gain further insights into the company’s performance and prospects for the future. The company’s valuation metrics, including its low forward P/E ratio and PEG ratio, suggest potential value. However, the recent lagging performance and anticipated earnings decline raise questions about the company’s near-term trajectory.
