Owens Corning (OC) Sold Out Conditions and Management Execution Should Drive Multiple Expansion - Jefferies

May 14, 2021 8:33 AM EDT
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Price: $94.65 +0.01%

Rating Summary:
    14 Buy, 21 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 15 | Down: 13 | New: 24
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Jefferies analyst Philip Ng reiterated a Buy rating and $135.00 price target on Owens Corning (NYSE: OC) after hosting investor meetings with Ken Parks (CFO) and walking away believing there is significant untapped earnings power in insulation & composites while the risk of a large downdraft in roofing is low.

The analyst stated "Insulation is expected to be sold out in 2021. Price realization has been strong & given such tight market conditions, OC is confident it should see good price realization on its 8% Jun 28 fiberglass increase, despite JM pushing its increase to Sep. If starts stabilize in the ~1.5 mil range, OC believes the industry can service demand with its current capacity and productivity improvements (2-3%/yr.)." Regarding roofing, he stated "Mgmt appears to have decent visibility into 3Q, and even assuming a typical seasonal slowdown in 4Q, with the industry on allocation, OC expects to run its assets hard in 4Q, which should help replenish inventory in the channel. This is keeping S/D tight & supporting good price realization, which coupled with the Jun increase, should more than offset the expected $100+ mil of inflation in roofing."

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

Shares of Owens Corning closed at $103.85 yesterday.

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