KeyBanc Cuts Estimates on Owens-Illinois (OI), Names it "Top Pick" and Maintains Buy Rating
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Price: $7.18 +12.54%
Rating Summary:
10 Buy, 11 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
10 Buy, 11 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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KeyBanc is reiterating its Buy rating and $35 price target on shares of Owens-Illinois (NYSE: OI) while calling the stock its "top pick" along with Silgan Holdings (Nasdaq: SLGN).
Within the past month packaging companies continue to implement price increases to catch up on earlier inflation, commodity prices have traded in a range essentially marking time, volumes have generally moderated, and inventories continue to modestly build.
The firm believes that it will take another quarter for current cost inflation to be factored in by packaging companies. Until then, volume moderation will likely be an additional headwind.
KeyBanc is lowering its Q2 EPS estimate from $0.83 to $0.65, below the Street's estimate of $0.82. The firm also is lowering its FY11 and FY12 EPS estimates from $2.75 and $3.50 to $2.50 and $3.25, mixed with the Street's predictions of $2.78 and $3.34.
An analyst at KeyBanc comments, "In past analyst day venues and earnings calls, CEO Al Stroucken has asserted OI's ability to earn roughly $4.50-$5.50 in the 2012 time frame. We continue to view this as overly optimistic and hope the Company will address these expectations in the near future. It remains our view that the earnings improvement story remains intact, albeit delayed, such that expectations in the $4.50-$5.00 range are more achievable in the 2014 time frame and suggest significant upside potential."
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 $25.07 yesterday.
Within the past month packaging companies continue to implement price increases to catch up on earlier inflation, commodity prices have traded in a range essentially marking time, volumes have generally moderated, and inventories continue to modestly build.
The firm believes that it will take another quarter for current cost inflation to be factored in by packaging companies. Until then, volume moderation will likely be an additional headwind.
KeyBanc is lowering its Q2 EPS estimate from $0.83 to $0.65, below the Street's estimate of $0.82. The firm also is lowering its FY11 and FY12 EPS estimates from $2.75 and $3.50 to $2.50 and $3.25, mixed with the Street's predictions of $2.78 and $3.34.
An analyst at KeyBanc comments, "In past analyst day venues and earnings calls, CEO Al Stroucken has asserted OI's ability to earn roughly $4.50-$5.50 in the 2012 time frame. We continue to view this as overly optimistic and hope the Company will address these expectations in the near future. It remains our view that the earnings improvement story remains intact, albeit delayed, such that expectations in the $4.50-$5.00 range are more achievable in the 2014 time frame and suggest significant upside potential."
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 $25.07 yesterday.
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