OMNOVA Solutions Inc. (OMN) just posted a record-setting quarter to mark the sixth consecutive earnings surprise. Estimates continue to climb leaving OMN with a Zacks #1 Rank (Strong Buy).
OMNOVA Solutions makes emulsion polymers and other specialty chemicals that have decorative and functional uses. The company serves commercial, industrial and residential markets.
On Jun 29 OMNOVA reported quarterly results that showed net income of just over $15 million, triple the level one year ago. Earnings per share broke down to 29 cents, beating the Zacks Consensus Estimate by a dime.
The company saw a very nice 40% increase in sales, to $65 million, driven by higher pricing and more volume.
Following the news, analysts revised their full-year estimates. OMNOVA is expected to earn 92 cents this year, up 8 cents. Next year’s estimates are averaging 96 cents, a 3 cent improvement.
Given the 68 cents earned last year, the year-over-year growth rates are now 36% and 4%, respectively.
Shares of OMN are trading at a nice discount. Currently you can own a piece of OMNOVA for less than 9 times forward earnings. The PEG ratio is a miniscule 0.2 times.
Even with the great quarterly report, shares are still hitting resistance at this level. However, with momentum going the right way the stock has a good chance to break out and set a new 52-week high.
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