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Olin (OLN) Gains As Market Dips: What You Should Know

This story originally appeared on Zacks

In the latest trading session, Olin (OLN) closed at $57.52, marking a +0.19% move from the previous day. The stock outpaced the S&P 500’s daily loss of 0.26%. Elsewhere, the Dow lost 0.16%, while the tech-heavy Nasdaq lost 0.04%.

– Zacks

Coming into today, shares of the chlor-alkali and ammunition producer’had gained 9.35% in the past month. In that same time, the Basic Materials sector gained 6.01%, while the S&P 500 gained 4.82%.

Investors will be hoping for strength from Olin as it approaches its next earnings release. In that report, analysts expect Olin to post earnings of $2.43 per share. This would mark year-over-year growth of 2125%. Our most recent consensus estimate is calling for quarterly revenue of $2.34 billion, up 41.23% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.60 per share and revenue of $8.84 billion. These totals would mark changes of +737.04% and +53.45%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Olin. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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. Within the past 30 days, our consensus EPS projection remained stagnant. Olin is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note Olin’s current valuation metrics, including its Forward P/E ratio of 6.68. For comparison, its industry has an average Forward P/E of 13.35, which means Olin is trading at a discount to the group.

Investors should also note that OLN has a PEG ratio of 0.12 right now. 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 Chemical – Diversified industry currently had an average PEG ratio of 1.18 as of yesterday’s close.

The Chemical – Diversified industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 93, putting it in the top 37% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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