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Olin (OLN) Gains But Lags Market: What You Should Know

Zacks Equity Research
·2-min read

Olin (OLN) closed at $48.58 in the latest trading session, marking a +0.89% move from the prior day. The stock lagged the S&P 500's daily gain of 2.45%. At the same time, the Dow added 2.15%, and the tech-heavy Nasdaq gained 0.17%.

Coming into today, shares of the chlor-alkali and ammunition producer'had lost 24.32% in the past month. In that same time, the Basic Materials sector lost 9.64%, while the S&P 500 lost 5.71%.

Investors will be hoping for strength from Olin as it approaches its next earnings release. The company is expected to report EPS of $2.58, up 49.13% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.53 billion, up 13.71% from the year-ago period.

OLN's full-year Zacks Consensus Estimates are calling for earnings of $10.06 per share and revenue of $9.82 billion. These results would represent year-over-year changes of +24.66% and +10.19%, respectively.

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Any recent changes to analyst estimates for Olin should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.11% higher. Olin currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Olin is holding a Forward P/E ratio of 4.79. For comparison, its industry has an average Forward P/E of 9.2, which means Olin is trading at a discount to the group.

The Chemical - Diversified industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 79, which puts it in the top 32% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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Zacks Investment Research