OC - Embedded Expectations Analysis - 2020 12 14
Owens Corning (OC:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 24.9x Uniform P/E. Even at these levels, the market has bearish expectations for the firm, and management may be concerned about insulation volume growth, demand sustainability, and pricing headwindsSpecifically, management may lack confidence in their ability to strengthen their EBIT and revenue, meet their strong Q4 2020 outlook, and improve volumes. They may also have concerns about the repercussions of bringing capacity down in Kansas City, the sustainability of demand, and the continued impact of pricing headwinds. Furthermore, they may lack confidence in their ability to increase prices and improve their residential growth. Finally, they may lack confidence in their ability to operate their manufacturing network efficiently and flexibly, recommence halted projects, and sustain their remodeling and repair business performance
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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