On Wednesday, Loop Capital adjusted its stock price target for Owens Corning (NYSE:OC), a company specializing in insulation, roofing, and fiberglass composites, reducing it to $200 from the previous target of $215. Despite the adjustment, the firm maintained its Buy rating on the stock.
Owens Corning (NYSE:GLW) reported earnings that surpassed expectations, yet the stock experienced a decline, influenced by a third-quarter guidance that was slightly below the consensus. This was attributed mainly to weaker projections for the company's Doors segment.
In response to these developments, Loop Capital revised its full-year 2025 estimates and price target, opting for a more conservative growth outlook for the Doors segment due to potential ongoing sales challenges linked to a slowdown in big-ticket remodeling.
The firm also made minor adjustments to its assumptions for Owens Corning's insulation segment. This revision reflects a slowdown in residential new construction and persistent challenges in the European market. Despite these headwinds, Loop Capital's stance on Owens Corning remains positive. The analyst believes that several factors previously highlighted continue to support the company's potential for a revaluation.
These factors include the completion of the Doors integration, an anticipated improvement in the remodeling cycle, the conclusion of a strategic review of glass reinforcement operations, and the expectation that the core margins for roofing and insulation will remain robust. These margins are anticipated to benefit from sustained price and cost management as well as enhancements in capacity and productivity.
In other recent news, Owens Corning reported a strong performance in its second quarter, with a 10% increase in adjusted EBIT to $588 million and a 12% rise in adjusted EBITDA to $742 million. This was complemented by the strategic acquisition of Masonite, further expanding the company's portfolio of residential building products. RBC Capital Markets responded positively to these developments, raising its price target for Owens Corning from $211.00 to $213.00 and maintaining an Outperform rating.
In addition to these financial results, Owens Corning is making strategic moves towards capacity expansion and the transformation into a building products company. The company also plans to return approximately 50% of its strong free cash flow to shareholders. The performance of the Roofing and Insulation segments was particularly robust, contributing to the company's overall success.
Analysts from RBC Capital forecast an EPS of $4.14 for the third quarter, a slight increase from the prior estimate of $4.07. They also increased their forecast for the company's fiscal year 2024 earnings per share by 5% to $15.65. These projections reflect the ongoing positive developments in Owens Corning's business and the potential for future growth.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.