On Thursday, RBC (TSX:RY) Capital Markets updated their outlook on shares of Owens Corning (NYSE:OC), increasing the price target to $192 from $175. The firm maintained its Outperform rating on the stock, attributing the adjustment to better-than-expected performance in the company's Roofing division.
The firm's analysts noted that Owens Corning (NYSE:GLW) delivered another robust margin result in Roofing, which, along with increased pricing gains in both Roofing and Insulation segments, is expected to continue driving financial growth. This positive outcome is anticipated to more than compensate for the ongoing weaknesses observed in the Composites sector.
As a result of these developments, RBC Capital has revised its full year 2024 earnings per share (EPS) estimate upward by 12% to $15.09, and its adjusted EBITDA forecast by 7%. This revision reflects the company's guidance for sustained high Roofing margins, which are expected to remain above 30%.
In light of the upward guidance provided by Owens Corning, RBC Capital has also increased its second-quarter earnings per share estimate by 15%. The firm reiterates its Outperform rating, with the new price target of $192 reflecting the higher earnings estimates.
InvestingPro Insights
Owens Corning's (NYSE:OC) recent performance has caught the eye of RBC Capital Markets, leading to a raised price target. Supporting this optimistic outlook, InvestingPro data reveals a solid financial foundation for the company.
With a market capitalization of $14.36 billion and a P/E ratio that has adjusted down to 11.49 in the last twelve months as of Q1 2024, the company shows signs of being reasonably valued relative to its earnings. Moreover, the dividend yield stands at 1.45%, which is notable considering the company has increased its dividend for 5 consecutive years—a testament to its financial health and commitment to shareholder returns.
Investors tracking the stock's momentum will find the 6-month price total return of 50.61% particularly compelling, alongside a remarkable 1-year price total return of 67.98%, indicating strong recent performance.
Owens Corning's management has demonstrated confidence in the company's prospects through aggressive share buybacks, which is often seen as a positive signal by market observers. For those seeking further insights and guidance, there are additional InvestingPro Tips available, providing a deeper dive into the company's strategic moves and market position.
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