Office Depot (ODP) closed the most recent trading day at $1.98, moving -1.49% from the previous trading session. This move lagged the S&P 500's daily gain of 0.19%. At the same time, the Dow lost 0.11%, and the tech-heavy Nasdaq gained 0.81%.
Heading into today, shares of the office supply retailer had gained 19.64% over the past month, outpacing the Retail-Wholesale sector's loss of 0.29% and the S&P 500's gain of 0.56% in that time.
Wall Street will be looking for positivity from ODP as it approaches its next earnings report date. This is expected to be November 6, 2019. The company is expected to report EPS of $0.14, up 7.69% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.83 billion, down 1.97% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.37 per share and revenue of $10.82 billion. These totals would mark changes of +5.71% and -1.78%, respectively, from last year.
Any recent changes to analyst estimates for ODP should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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, the Zacks Consensus EPS estimate remained stagnant. ODP is currently sporting a Zacks Rank of #2 (Buy).
In terms of valuation, ODP is currently trading at a Forward P/E ratio of 5.51. This represents a discount compared to its industry's average Forward P/E of 11.85.
Meanwhile, ODP's PEG ratio is currently 0.5. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Miscellaneous was holding an average PEG ratio of 1.63 at yesterday's closing price.
The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 98, putting it in the top 39% 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.
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