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Jefferies Maintains a 'Buy' on Owens-Illinois (OI); Shares Due For A Nice Bounce

October 13, 2011 7:06 AM EDT
Get Alerts OI Hot Sheet
Price: $16.59 +2.47%

Rating Summary:
    11 Buy, 10 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Jefferies maintains a 'Buy' on Owens-Illinois (NYSE: OI) price target of $32.00.

Jefferies analyst says, "Based on OI's comments at a conference, we suspect the underlying fundamentals are tracking better than expected and we believe shares are due for a nice bounce. With OI trading at a sizable discount on just about any metric (4.7x 2012E EV/EBITDA, 5.9x 2012E P/E, 12.1% FCF yield), we believe a clean quarter would go a long way restoring credibility."

"Based on the company's commentary, OI appears to have learned from the
miscues from last quarter. OI restructured the organization structure so it can react more quickly to the changing dynamics of the marketplace to avoid the setbacks during 2Q. While the sentiment on OI has been decisively negative, the underlying fundamentals in the global glass industry has been good (historical low inventory in Europe and N.A.) and the competitive landscape has improved significantly. The issue at hand has been poor execution and a loss of mgmt credibility. As long as OI delivers a clean / less bad quarter, we believe shares could be due for a nice bounce. We are also encouraged by the significant insider buying, with CEO, Al Stroucken, buying back $2 mil of stock in September."

For more ratings news on Owens-Illinois click here and for the rating history of Owens-Illinois click here.

Shares of Owens-Illinois closed at $16.64 yesterday.


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