Price Forecast:

Bullish Case: Strong demand for OMF's loan offerings and successful integration of acquisitions may lead to increased revenues, enhancing investor confidence and supporting higher stock prices in the near term. Targeted earnings growth could translate into upward pressure on prices.

Bearish Case: Potential increases in loan delinquencies and macroeconomic headwinds could lead to elevated credit risks, prompting a reassessment of OMF's financial health and resulting in downward pressure on share prices if earnings miss expectations.

Potential Outcomes:

• Improved profit margins from strategic acquisitions (60% probability)
• Increased loan delinquencies negatively impacting earnings (40% probability)
• Stable performance with limited price movement due to low volatility (25% probability)
• Regulatory changes affecting lending practices (20% probability)
• Market re-evaluation leading to price correction (30% probability)

Trading Oracle: Considering the current implied volatility downward trend, use a bearish strategy by selling the $55 put and buying the $52.50 put for a credit spread. This captures premium and limits downside while targeting stable market conditions. Monitor loan performance closely for adjustments.

November 28, 2024