There is no way Omnicom Group Inc. (OMC) can keep these numbers up

Omnicom Group Inc. (NYSE: OMC) stock fell -1.32% on Friday to $64.13 against a previous-day closing price of $64.99. With 1.01 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.32 million shares. During the session, the Advertising Agencies company that operates in wider Communication Services sector, reached to the highest price of $65.25 whereas the lowest price it dropped to was $64.10. The 52-week range on OMC shows that it touched its highest point at $91.61 and its lowest point at $61.31 during that stretch. It currently has a 1-year price target of $76.85. With its current market cap of 13.52 billion, OMC has annualized dividend of $2.80 while the current yield stands at 4.37%. Beta for the stock currently stands at 0.84.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of OMC was down-trending over the past week, with a drop of -6.99%, but this was down by -8.00% over a month. Three-month performance surged to 2.48% while six-month performance fell -22.31%. The stock lost -11.47% in the past year, while it has lost -12.47% so far this year. A look at the trailing 12-month EPS for OMC yields 5.96 with Next year EPS estimates of 6.63. For the next quarter, that number is 1.68. This implies an EPS growth rate of 45.80% for this year and 0.44% for next year. EPS is expected to grow by 10.60% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 6.00%.

Float and Shares Shorts:

At present, 205.30 million OMC shares are outstanding with a float of 202.07 million shares on hand for trading. On Jul 14, 2022, short shares totaled 10.18 million, which was 4.97% higher than short shares on Jun 14, 2022. In addition to Mr. John D. Wren as the firm’s Chairman & CEO, Mr. Daryl D. Simm serves as its Pres & COO.

Institutional Ownership:

Through their ownership of 96.96% of OMC’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 53.63% of OMC, in contrast to 39.90% held by mutual funds. Shares owned by individuals account for 2.17%. As the largest shareholder in OMC with 11.52% of the stake, The Vanguard Group, Inc. holds 23,599,253 shares worth 23,599,253. A second-largest stockholder of OMC, BlackRock Fund Advisors, holds 12,944,273 shares, controlling over 6.32% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in OMC, holding 11,262,804 shares or 5.50% stake. With a 2.97% stake in OMC, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 6,086,639 shares are owned by the mutual fund manager. The Vanguard Mid Cap Index Fund, which owns about 2.31% of OMC stock, is the second-largest Mutual Fund holder. It holds 4,724,916 shares valued at 316.1 million. Vanguard 500 Index Fund holds 2.24% of the stake in OMC, owning 4,592,991 shares worth 307.27 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for OMC since 14 analysts follow the stock currently. There are 4 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With OMC analysts setting a high price target of $102.00 and a low target of $54.00, the average target price over the next 12 months is $77.68. Based on these targets, OMC could surge 59.05% to reach the target high and fall by -15.8% to reach the target low. Reaching the average price target will result in a growth of 21.13% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. OMC will report FY 2022 earnings on 02/16/2023. Analysts have provided yearly estimates in a range of $7.86 being high and $5.97 being low. For OMC, this leads to a yearly average estimate of $6.65. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Omnicom Group Inc. surprised analysts by $0.11 when it reported $1.68 EPS against a consensus estimate of $1.57. The surprise factor in the prior quarter was $0.09. Based on analyst estimates, the high estimate for the next quarter is $1.76 and the low estimate is $1.61. The average estimate for the next quarter is thus $1.69.

Summary of Insider Activity:

Insiders traded OMC stock several times over the past three months with 14 Buys and 8 Sells. In these transactions, 202,387 shares were bought while 119,133 shares were sold. The number of buy transactions has increased to 41 while that of sell transactions has risen to 16 over the past year. The total number of shares bought during that period was 275,490 while 144,813 shares were sold.

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