OI - O-I Glass: Guidance Cut Creates New Buy Opportunity

2024-05-02 10:30:00 ET

Summary

• O-I Glass's Q1 results showed pressure from customer destocking, with gross profit falling by about a third.
• The company's operating cash flow was negative, but adjusted for changes in working capital, it was positive.
• O-I Glass reduced its full-year guidance, leading to a disappointing market reaction and a decrease in expected sales volume growth.

Introduction

I have been following O-I Glass ( OI ) for several years now as I like the packaging and container industry and think O-I’s glass containers are in a good position to take advantage of the increasing demand. The company’s balance sheet isn’t the strongest but the underlying earnings and free cash flow result are ensuring the company’s net debt situation remains under control. O-I’s share price has been very volatile in the past few years and the stock is now trading more than 40% below its July 2023 high on the back of a guidance cut for 2024....

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