France’s OL Groupe, a significant player in the entertainment and media sector, experienced a considerable setback on Friday. Its shares unprecedentedly dipped more than 16% to EUR2.08. In contrast, CAC 40 index managed a modest increase of 0.37%. Consequently, OL Groupe reported its third consecutive weekly loss, reflecting undeniable investor scepticism.
OL Groupe struggles against market headwinds
This unfortunate trend marks a 17% decline from OL Groupe’s 52-week high, impacting its closing price at EUR2.48. Investor hesitations around this stock are very likely. Alongside managing the well-recognised Olympique Lyonnais football club, the OL Groupe is braving industry-wide hurdles resulting from the pandemic particularly threatening to live stadium and event revenues.
Worrisome financial metrics
Recent annual earnings per share (EPS) posted at negative EUR1.4 has raised further concerns. The return on equity (ROE) manifests an alarming figure: negative 89.25%, unveiling OL Groupe’s struggles in turning a profit using investor funds. Such disconcerting results could potentially discourage investors further.
Analysis of OL Groupe’s volatility
Despite the concerning weekly volatility rate of 7.21% for OL Groupe, a deeper look at its average monthly and quarterly volatility paints a different picture. It reports a rather minimal negative 1.81% and a positive 1.13% respectively. Thus, the plunge in stock price could potentially be attributed to external market forces or company-specific issues like disappointing earnings results, maybe both. These drastic market movements spotlight the imperative for cautious investor approach, especially when dealing with stocks known for high volatility.
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