UPDATE: UBS Starts Owens Corning (OC) at Buy
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UBS analyst John Lovallo initiates coverage on Owens Corning (NYSE: OC) with a Buy rating and a price target of $122.00.
The analyst comments "We initiate OC at Buy. Three key reasons to Buy. 1) We model OC generating over $1bn of free cash flow per year through 2024 (+6% vs. cons in '22e), with a 12% 2023e FCF yield; 2) Significant FCF should allow OC to buy back roughly 12% of its stock by 2024, while reinvesting $1.4bn in capex, completing $555mm of acquisitions, paying roughly $400mm in dividends and retiring $1.2bn of debt on a cumulative basis over the next 3 years; 3) We expect OC's organic revenue growth to outpace the underlying market, while acquisitions should position the company in close proximity to its 2024 revenue target of $10bn."
Shares of Owens Corning closed at $93.35 yesterday.
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