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Owens Corning (OC)
NYSE:OC
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Owens Corning
(NYSE:OC)71Outperform
Positive Factors
Expansion and Growth
The recently announced new laminate shingle manufacturing facility in the southeastern US should be completed in 2027 and immediately prove valuable by serving the largest asphalt shingle region in the country.
Financial Performance
Owens Corning reported strong 4Q24 results with revenue, EBITDA, and EPS all coming in well above consensus expectations.
Negative Factors
End-Market Challenges
Some of the company’s markets are challenging end markets to be exposed to with a lack of existing home sales.
Owens Corning (OC) vs. S&P 500 (SPY)
Market Cap
$13.18B
Dividend Yield1.62%
Average Volume (3M)931.63K
Price to Earnings (P/E)20.9
Beta (1Y)1.58
Revenue Growth13.41%
EPS Growth-44.36%
CountryUS
Employees18,000
SectorIndustrials
Sector Strength66
IndustryConstruction
Share Statistics
EPS (TTM)7.27
Shares Outstanding85,540,565
10 Day Avg. Volume1,297,513
30 Day Avg. Volume931,629
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.20
Price to Cash Flow (P/CF)4.90
P/FCF Ratio4.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$205.67Price Target Upside42.80% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
Owens Corning Business Overview & Revenue Model
Company DescriptionOwens Corning engages in the development, manufacture, and marketing of insulation, roofing, and fiberglass composites. It operates through the following segments: Composites, Insulation and Roofing. The Composites segment manufactures, fabricates, and sells glass reinforcements in the form of fiber, and also includes vertically integrated downstream activities. The Insulation segment provides insulating products which help customers conserve energy; provide improved acoustical performance; and offer convenience of installation and use. The Roofing segment offers laminate and strip asphalt roofing shingles and other products including oxidized asphalt and roofing accessories. The company was founded on October 31, 1938 and is headquartered in Toledo, OH.
How the Company Makes MoneyOwens Corning generates revenue through the sale of its products across its three main segments: Composites, Insulation, and Roofing. In the Composites segment, the company manufactures and markets glass fiber reinforcements and other materials used in various industries, including automotive, wind energy, and electronics. The Insulation segment provides fiberglass insulation products that improve energy efficiency in residential and commercial buildings. The Roofing segment offers roofing shingles and related accessories to contractors and homeowners. Key revenue streams include direct sales to contractors, distributors, and retailers. The company benefits from strategic partnerships and a strong distribution network, which enhance its market reach and customer base. Additionally, Owens Corning invests in innovation and sustainability initiatives to maintain a competitive edge and meet evolving market demands.
Owens Corning Financial Statement Overview
Summary
Owens Corning has shown impressive revenue growth and strong operational efficiency. While net income has declined, impacting the net profit margin and return on equity, the company's balance sheet remains strong with low leverage. Cash flow management is a significant strength, reflecting robust free cash flow generation and efficient capital expenditure. Overall, Owens Corning is in a solid financial position, albeit with some profitability concerns.Income Statement
Owens Corning has demonstrated robust revenue growth, rising from $9.68 billion in 2023 to $10.98 billion in 2024, marking a 13.3% increase. The gross profit margin for 2024 stands at 29.6%, showing strong profitability. However, the net profit margin has decreased to 5.9% from 12.4% in 2023, primarily due to decreased net income. EBIT and EBITDA margins are robust at 10.3%, reflecting solid operational efficiency.85
Very Positive
Balance Sheet
The balance sheet displays a sound equity base with a debt-to-equity ratio of 0.10, indicating low leverage. The equity ratio is strong at 36.1%, suggesting good financial stability. Return on equity has decreased to 12.7% from 23.2% in 2023, reflecting a reduction in profitability relative to equity.78
Positive
Cash Flow
Owens Corning showcases excellent cash flow management, with a free cash flow of $1.89 billion in 2024, a 58.6% increase from 2023. The operating cash flow to net income ratio is high, indicating strong cash generation relative to reported earnings. The free cash flow to net income ratio is exceptionally robust, highlighting efficient capital expenditure control.90
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 10.97B | 9.68B | 9.76B | 8.50B | 7.05B | Gross Profit |
| 3.25B | 2.68B | 2.62B | 2.22B | 1.61B | EBIT |
| 1.13B | 1.81B | 1.71B | 1.44B | 820.00M | EBITDA |
| 1.13B | 2.17B | 2.20B | 1.91B | 341.00M | Net Income Common Stockholders |
| 647.00M | 1.20B | 1.24B | 995.00M | -385.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 361.00M | 1.61B | 1.10B | 959.00M | 717.00M | Total Assets |
| 14.07B | 11.24B | 10.75B | 10.02B | 9.48B | Total Debt |
| 500.00M | 3.27B | 3.20B | 3.12B | 3.23B | Net Debt |
| 139.00M | 1.66B | 2.10B | 2.16B | 2.51B | Total Liabilities |
| 8.96B | 6.03B | 6.13B | 5.68B | 5.54B | Stockholders Equity |
| 5.08B | 5.17B | 4.58B | 4.30B | 3.90B |
| Cash Flow | Free Cash Flow | |||
| 1.89B | 1.19B | 1.31B | 1.09B | 828.00M | Operating Cash Flow |
| 1.89B | 1.72B | 1.76B | 1.50B | 1.14B | Investing Cash Flow |
| -3.39B | -356.00M | -623.00M | -377.00M | -205.00M | Financing Cash Flow |
| 334.00M | -877.00M | -974.00M | -881.00M | -358.00M |
Owens Corning Technical Analysis
Negative
144.03
Price Trends
173.94
Negative
182.01
Negative
175.99
Negative
Market Momentum
-8.59
Positive
19.12
Positive
7.30
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OC, the sentiment is Negative. The current price of 144.03 is below the 20-day moving average (MA) of 169.21, below the 50-day MA of 173.94, and below the 200-day MA of 175.99, indicating a bearish trend. The MACD of -8.59 indicates Positive momentum. The RSI at 19.12 is Positive, neither overbought nor oversold. The STOCH value of 7.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OC.
Owens Corning Risk Analysis
Owens Corning disclosed 34 risk factors in its most recent earnings report. Owens Corning reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Owens Corning Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $32.67B | 36.10 | 11.23% | 0.77% | -4.68% | -1.73% | |
71 Outperform | $13.18B | 20.90 | 12.74% | 1.62% | 13.41% | -44.36% | |
66 Neutral | $7.53B | 16.17 | 31.68% | 0.44% | 0.64% | -1.15% | |
63 Neutral | $29.46B | 14.92 | 21.10% | 0.65% | -3.56% | 70.93% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
60 Neutral | $15.94B | 20.03 | -118.61% | 1.57% | -1.74% | -6.91% | |
59 Neutral | $9.21B | 10.01 | -54.55% | 1.04% | -0.45% | -1.48% |
* Industrials Sector Average
Performance Comparison
OC
Owens Corning
144.03
-5.28
-3.54%
CX
Cemex SAB
5.93
-1.85
-23.78%
EXP
Eagle Materials
215.05
-40.17
-15.74%
MLM
Martin Marietta Materials
461.92
-141.96
-23.51%
MAS
Masco
72.50
-2.73
-3.63%
VMC
Vulcan Materials
234.86
-31.05
-11.68%
Owens Corning Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -12.95% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
Owens Corning demonstrated strong financial performance and strategic execution by increasing revenue and margins, making strategic acquisitions and divestitures, and improving safety measures. Despite some challenges with declining component volumes and soft European markets, the company is well-positioned for future growth and shareholder value creation.Highlights
Record Revenue and Margin Performance
Owens Corning reported a 23% increase in Q4 revenue, reaching $2.8 billion, with an adjusted EBIT margin of 15% and an adjusted EBITDA margin of 22%. For the full year, revenue was $11 billion, up 13%, with EBIT of $2 billion and EBITDA of $2.7 billion.
Strategic Acquisitions and Divestitures
The company successfully acquired Masonite, expanding its product portfolio, and divested its building materials business in Asia along with the glass reinforcements business, focusing on core markets in North America and Europe.
Safety Improvements
The company achieved a 25% reduction in injuries with a recordable incident rate of 0.5, showing significant improvement in safety performance.
Increased Shareholder Returns
Owens Corning returned 51% of free cash flow to shareholders and increased dividends for the eleventh consecutive year.
Lowlights
Declining Component Volumes
The roofing components volumes decreased, as attachment rates normalized and distributors worked through existing inventories.
Challenging European Markets
The insulation business faced demand headwinds in Europe due to a soft market environment, impacting performance.
Tariff Impact Concerns
Potential tariffs could impact the company's cross-border supply chains, particularly affecting the Doors and Insulation segments.
Company Guidance
During Owens Corning's fourth quarter and full year 2024 earnings call, the company reported significant growth, delivering $2.8 billion in revenue for the fourth quarter, representing a 23% increase, with adjusted EBIT and EBITDA margins at 15% and 22%, respectively. For the full year, revenues reached $11 billion, up 13%, with adjusted EBIT of $2 billion and adjusted EBITDA of $2.7 billion. The company's roofing and insulation segments showed robust margin expansion, with a full-year adjusted EBIT margin of 19% and adjusted EBITDA margin of 25%. Owens Corning returned 51% of free cash flow to shareholders, marking its eleventh consecutive year of increasing dividends. The company made strategic moves, including acquiring Masonite and divesting its building materials business in Asia and its glass reinforcements business. These actions, combined with ongoing investments in expanding manufacturing capacity, position Owens Corning for long-term growth and continued strong financial performance. The outlook for the first quarter of 2025 includes expected revenue growth in the mid-20% range compared to the previous year, with anticipated EBITDA margins of low 20% for the enterprise.Owens Corning Corporate Events
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Owens Corning to Sell Glass Reinforcements Business
Neutral
Feb 14, 2025
Owens Corning announced a definitive agreement to sell its global glass reinforcements business to Triumph Non-Ionics Pvt Ltd. and 3B Lux S.à.r.l, part of the Praana Group, for $755 million. This transaction, expected to complete in 2025, will lead to the classification of the GR Business as discontinued operations and the elimination of the Composites business segment, with financial reporting adjustments reflecting this change. Owens Corning anticipates utilizing $360 million in after-tax net proceeds from the sale to drive organic growth and return cash to shareholders, while integrating retained businesses into its Roofing and Insulation segments.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.