Owens Corning (OC) AI Stock Analysis

• Market Cap: $12.44B
• Dividend Yield: 1.78%
• Average Volume (3M): 988.26K
• Price to Earnings (P/E): 19.7
• Beta (1Y): 1.30
• Revenue Growth: 13.41%
• EPS Growth: -44.36%
• Country: US
• Employees: 25,000
• Sector: Industrials
• Sector Strength: 75
• Industry: Construction
• EPS (TTM): 7.27
• Shares Outstanding: 85,540,565
• 10 Day Avg. Volume: 874,380
• 30 Day Avg. Volume: 988,259
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.59
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 6.10
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $185.60
• Price Target Upside: 27.64% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

Owens Corning's strong financial performance, characterized by impressive revenue growth and robust cash flow management, is a significant positive factor. The strategic moves discussed in the earnings call further enhance the company's long-term growth prospects. However, technical analysis suggests caution due to bearish momentum, and valuation metrics indicate reasonable pricing with moderate dividend yield. Despite challenges in European markets and declining component volumes, the company remains well-positioned for growth.

Positive Factors

Financial Performance

Owens Corning reported strong 4Q24 results with revenue, EBITDA, and EPS all coming in well above consensus expectations.

Strategic Initiatives

The sale of the glass reinforcements business is expected to improve return-on-capital for the company.

Negative Factors

Insulation Segment Issues

Estimates for the first quarter are coming down, particularly due to challenges in the Insulation segment.

Market Challenges

End-market concerns are growing, with little near-term optimism over the past few weeks.

Owens Corning Business Overview & Revenue Model

Company Description

Owens Corning manufactures and markets insulation, roofing, and fiberglass composite materials in the United States, Canada, Europe, the Asia Pacific, and internationally. It operates in three segments: Composites, Insulation, and Roofing. The Composites segment manufactures, fabricates, and sells glass reinforcements in the form of fiber; and glass fiber products in the form of fabrics, non-wovens, and other specialized products. Its products are used in building structures, roofing shingles, tubs and showers, pools, flooring, pipes and tanks, poles, electrical equipment, and wind-energy turbine blades applications in the building and construction, renewable energy, and infrastructure markets. This segment sells its products directly to parts molders, fabricators, and shingle manufacturers. The Insulation segment manufactures and sells insulation products for residential, commercial, industrial, and other markets for thermal and acoustical applications; and glass fiber pipe insulation, flexible duct media, bonded and granulated mineral fiber insulation, cellular glass insulation, and foam insulation products used in construction applications. This segment sells its products primarily to the insulation installers, home centers, lumberyards, retailers, and distributors under the Thermafiber, FOAMULAR, FOAMGLAS, Paroc, Owens Corning PINK, and FIBERGLAS Insulation brand names. The Roofing segment manufactures and sells aminate and strip asphalt roofing shingles, oxidized asphalt materials, and roofing components used in residential and commercial construction, and specialty applications, as well as synthetic packaging materials. This segment sells its products through distributors, home centers, lumberyards, retailers, and contractors, as well as to roofing contractors for built-up roofing asphalt systems; and manufacturers in automotive, chemical, rubber, and construction industries. Owens Corning was incorporated in 1938 and is headquartered in Toledo, Ohio.

How the Company Makes Money

Owens 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.

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.

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.

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

• Technical Analysis Sentiment: Neutral
• Last Price: 145.41
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OC, the sentiment is Neutral. The current price of 145.41 is above the 20-day moving average (MA) of 138.70, above the 50-day MA of 144.95, and below the 200-day MA of 168.95, indicating a neutral trend. The MACD of -0.51 indicates Negative momentum. The RSI at 54.54 is Neutral, neither overbought nor oversold. The STOCH value of 87.58 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for OC.

Owens Corning Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CSL	79 Outperform	$16.41B	10.37	33.11%	1.01%	-0.14%	135.52%
OC	77 Outperform	$12.44B	19.73	12.63%	1.78%	13.41%	-44.36%
BECN	72 Outperform	$7.72B	25.25	16.54%	―	4.93%	―
BLDR	71 Outperform	$13.61B	13.23	23.88%	―	-4.08%	-24.71%
WMS	70 Outperform	$8.74B	18.84	34.07%	0.56%	3.67%	-5.03%
MAS	64 Neutral	$12.76B	16.53	-118.61%	1.95%	-2.67%	-10.72%
Sector *	63 Neutral	$4.23B	11.54	5.34%	209.77%	4.14%	-9.49%

Owens Corning Corporate Events

Owens Corning to Sell Glass Reinforcements Business

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.