Is Olin Corporation (OLN) positioned for future growth?

Olin Corporation (NYSE: OLN) stock jumped 0.17% on Wednesday to $58.03 against a previous-day closing price of $57.93. With 0.96 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.72 million shares. During the session, the Specialty Chemicals company that operates in wider Basic Materials sector, reached to the highest price of $58.36 whereas the lowest price it dropped to was $57.30. The 52-week range on OLN shows that it touched its highest point at $67.25 and its lowest point at $41.33 during that stretch. It currently has a 1-year price target of $62.41. With its current market cap of 7.90 billion, OLN has annualized dividend of $0.80 while the current yield stands at 1.38%. Beta for the stock currently stands at 1.42.

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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 OLN was up-trending over the past week, with a rise of 2.84%, but this was up by 17.30% over a month. Three-month performance dropped to -0.57% while six-month performance fell -7.49%. The stock lost -3.60% in the past year, while it has gained 0.89% so far this year. A look at the trailing 12-month EPS for OLN yields 9.31 with Next year EPS estimates of 6.35. For the next quarter, that number is 1.41. This implies an EPS growth rate of 229.50% for this year and -28.27% for next year. EPS is expected to grow by 1.59% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 220.60%.

Float and Shares Shorts:

At present, 141.20 million OLN shares are outstanding with a float of 136.28 million shares on hand for trading. On Oct 13, 2022, short shares totaled 4.18 million, which was 2.88% higher than short shares on Sep 14, 2022. In addition to Mr. Scott McDougald Sutton as the firm’s Pres, CEO & Chairman, Mr. Todd A. Slater serves as its Sr. VP & CFO.


Institutional Ownership:

Through their ownership of 90.42% of OLN’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 49.76% of OLN, in contrast to 37.92% held by mutual funds. Shares owned by individuals account for 2.04%. As the largest shareholder in OLN with 10.79% of the stake, The Vanguard Group, Inc. holds 14,776,624 shares worth 14,776,624. A second-largest stockholder of OLN, BlackRock Fund Advisors, holds 10,564,496 shares, controlling over 7.71% of the firm’s shares. Sachem Head Capital Management LP is the third largest shareholder in OLN, holding 6,465,160 shares or 4.72% stake. With a 3.01% stake in OLN, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 4,123,315 shares are owned by the mutual fund manager. The iShares Core S&P Mid Cap ETF, which owns about 2.96% of OLN stock, is the second-largest Mutual Fund holder. It holds 4,056,562 shares valued at 214.79 million. Vanguard Small Cap Index Fund holds 2.60% of the stake in OLN, owning 3,557,765 shares worth 188.38 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for OLN since 18 analysts follow the stock currently. There are 12 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With OLN analysts setting a high price target of $88.00 and a low target of $45.00, the average target price over the next 12 months is $62.69. Based on these targets, OLN could surge 51.65% to reach the target high and fall by -22.45% to reach the target low. Reaching the average price target will result in a growth of 8.03% 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. OLN will report FY 2022 earnings on 01/26/2023. Analysts have provided yearly estimates in a range of $9.05 being high and $8.52 being low. For OLN, this leads to a yearly average estimate of $8.84. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Olin Corporation surprised analysts by $0.32 when it reported $2.14 EPS against a consensus estimate of $1.83. The surprise factor in the prior quarter was $0.26. Based on analyst estimates, the high estimate for the next quarter is $1.55 and the low estimate is $0.97. The average estimate for the next quarter is thus $1.41.

Summary of Insider Activity:

Insiders traded OLN stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 18 while that of sell transactions has risen to 14 over the past year. The total number of shares bought during that period was 144,174 while 2,641,685 shares were sold.

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