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ODP Corp. (ODP) Stock Sinks As Market Gains: Here's Why

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In the latest market close, ODP Corp. (ODP - Free Report) reached $14.61, with a -1.22% movement compared to the previous day. The stock fell short of the S&P 500, which registered a gain of 0.08% for the day. On the other hand, the Dow registered a gain of 0.08%, and the technology-centric Nasdaq increased by 0.52%.

The office supply retailer's stock has dropped by 18.15% in the past month, falling short of the Retail-Wholesale sector's loss of 9.1% and the S&P 500's loss of 7.33%.

Investors will be eagerly watching for the performance of ODP Corp. in its upcoming earnings disclosure. The company is expected to report EPS of $0.65, down 38.1% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.65 billion, down 11.86% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $2.56 per share and a revenue of $6.57 billion, demonstrating changes of -22.42% and -5.99%, respectively, from the preceding year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for ODP Corp. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, there's been a 41.33% fall in the Zacks Consensus EPS estimate. Right now, ODP Corp. possesses a Zacks Rank of #5 (Strong Sell).

Digging into valuation, ODP Corp. currently has a Forward P/E ratio of 5.79. This valuation marks a discount compared to its industry's average Forward P/E of 13.79.

It's also important to note that ODP currently trades at a PEG ratio of 0.41. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Retail - Miscellaneous industry had an average PEG ratio of 1.77 as trading concluded yesterday.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 77, positioning it in the top 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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