UPDATE: Citigroup Downgrades Owens Corning to Neutral, Cites Risks
Citigroup downgraded Owens Corning (NYSE: OC) from Buy to Neutral and raised the price target from $36.00 to $48.00.
Citigroup said, "We await better valuation points or conviction that the three following potential risks erode. (1) In Roofing, we question if strong 1Q13 shipments may pose risk to excess inventories again if storm demand is anemic, as well as if potential softer 4Q12 volumes could cause investors to question the earnings outlook. (2) In Composites, OC previously indicated that it should show $60MM (YoY) in 2013 EBIT improvement in a “modest growth environment” and we believe that modest may be higher than Citi economists global (industrial nations) GDP estimates. (3) In Insulation, we believe OC's guidance of $100MM in EBIT at 1MM housing starts factors in normalization 1-family starts as a % of total, which ran at only ~70% in 2011-12 versus OC's guidance for normal mix of 75-80% (for 2016)."
Owens Corning closed at $42.70 on Monday.
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