2023-05-24 09:15:23 ET
Owens Corning ( NYSE: OC ) on Wednesday was upgraded to Overweight from a previous investment rating of Equal weight by analysts at Barclays Capital. They said the maker of insulation, roofing and other building products is poised to increase its profit as developers build more single-family homes.
“We raise earnings estimates reflecting our better new residential market assumptions,” Matthew Bouley, analyst at Barclays, said in a May 24 report. “For Owens Corning ( OC ), our upgrade is more than just its new residential exposure -- as it has diversified beyond that in recent years – and reflects what we see a structurally higher and less volatile margin profile, on top of a highly attractive valuation.”
Barclays raised its price target on Owens Corning to $135 a share from $113 a share, based on a multiple of seven times estimated EBITDA of $1.9 billion for 2023, and assuming year-end debt of $1.7 billion (removes pension of $185 million and non-controlling interests of $21 million).
The price of Owens Corning ( OC ) shares are inexpensive compared with its recent history, Barclays said.
“Owens Corning ( OC ) is trading at a 20% discount to its post-Great Financial Crisis average P/E, a 35% discount to building products peers versus its post-GFC average discount of 27%, and a 43% discount to the S&P 500 ( SP500 ) versus its post-GFC average discount of 20%,” according to Barclays.
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Owens Corning upgraded to Overweight at Barclays Capital