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Hawk’s Nest

ODP Draws Bullish Flow Ahead of Expected Catalyst

by | May 9, 2022

ODP (ODP) seeing bullish flows on Friday with buyers of the June $50 calls 1550X and name that has over 5000 January $47 short puts and 1000 July $47 short puts in open interest. ODP is trading in a narrow bull flag below $47-$48 with a breakout move targeting a run to $54. The $2.22B company trades 10.45X earnings, 0.25X sales, and 8X FCF. ODP provides business services and supplies, products, and digital workplace technology solutions for small, medium, and enterprise businesses. These include office supply products, cleaning and breakroom supplies, technology services, copy and print services, and office furniture. ODP is coming off of a strong quarter and sees the inflationary environment and supply chain pressures easing in the 2H. They see upside into the 2H as well from launching their own digital platform business and building upon their B2B platform. ODP is also undergoing a review of their consumer business and could see new plans to unlock value throughout the year. Analysts have an average target for shares of $57. UBS positive on the name seeing potential for $4/share in EPS this year while fundamentally they should see positive tailwinds from the ‘return to work’ shift which will boost demand for office supplies. Short interest is 9.5%.