Wells Fargo Starts Owens-Illinois (OI) at Outperform; 2012 Pricing Key To Story

Wells Fargo initiates coverage on Owens-Illinois (NYSE: OI) with an Outperform. PT range $24-$27.

Wells analyst said, "We believe OI is on the cusp of a turnaround (yet again) and, while there have been many setbacks and execution issues (expropriation of Venezuelan operations, supply disruptions in the U.S. and flooding in Australia to name a few), recent results indicate progress is being made. Longer-term, the Company has set forth financial targets (albeit aggressive) that imply earnings power of ~$5.00 (attainable in the next 24-36 months should energy, currency and other inflationary costs remain relatively stable). We believe there is skepticism about OI's ability to deliver higher prices and improved margin in 2012, and acknowledge the 1H12 comparisons are challenging (particularly for currency), but remain encouraged and believe the risk/reward afforded over the next 12 months is attractive."

For an analyst ratings summary and ratings history on Owens-Illinois click here. For more ratings news on Owens-Illinois click here.

Shares of Owens-Illinois closed at $23.25 yesterday.

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