OC - Embedded Expectations Analysis - 2020 04 30
ï€ Owens Corning (OC:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 14.6x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about insulation volume growth, the macro environment, and shareholder valueï€ Specifically, management may lack confidence in their ability to mitigate market declines in the U.S. shingle market, limit general corporate expenses, and improve sales volumes in the technical and other building insulation segment. In addition, they may be concerned about the outlook for the global industrial production market, and they may be overstating the potential for a stronger U.S. new residential construction market and the sustainability of their strong cash contribution margins. Furthermore, they may lack confidence in their ability to continue to create shareholder value and sustain credit rating upgrades
Owens Corning is engaged in manufacturing and delivering a range of insulation, roofing, and fiberglass composite materials. The company's Composites segment includes vertically integrated downstream activities. The company manufactures, fabricates and sells glass reinforcements in the form of fiber. The company's Insulation segment includes a portfolio of high, mid and low-temperature products with a geographic mix of United States, Canada, Europe, Asia-Pacific and Latin America, a market mix of residential, commercial, industrial and other markets, and a channel mix of retail, contractor and distribution. The company's products in the Roofing segment are laminate and strip asphalt roofing shingles.
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