Yahoo Finance Earnings Miss: The ODP Corporation Missed EPS By 76% And Analysts Are Revising Their Forecasts
The ODP Corporation (NASDAQ:ODP) missed earnings with its latest first-quarter results, disappointing overly-optimistic forecasters. Results showed a clear earnings miss, with US$1.9b revenue coming in 4.5% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.40 missed the mark badly, arriving some 76% below what was expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for ODP
Taking into account the latest results, ODP's four analysts currently expect revenues in 2024 to be US$7.44b, approximately in line with the last 12 months. Statutory earnings per share are predicted to leap 159% to US$5.91. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$7.57b and earnings per share (EPS) of US$5.66 in 2024. So the consensus seems to have become somewhat more optimistic on ODP's earnings potential following these results.
There's been no major changes to the consensus price target of US$72.23, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on ODP, with the most bullish analyst valuing it at US$105 and the most bearish at US$53.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2024 compared to the historical decline of 6.7% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.9% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect ODP to suffer worse than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around ODP's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for ODP going out to 2026, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 3 warning signs for ODP you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
