Owens-Illinois Downgraded At Longbow, But Why?

In a report published Thursday, Longbow Research analyst Sean Coleman downgraded the rating on

to Neutral, saying that macro trends were "trumping" potential catalysts. Owens-Illinois reported its 1Q15 adjusted EPS at $0.44, at the high end of the guidance range and ahead of Longbow Reseach and consensus estimates. The beat was driven by lower corporate expense. Segment operating income declined $0.04. The company reduced its full-year EPS guidance to from $2.20-$2.60 to $2.00-$2.30, which represents a 10 percent decline at the mid-point, citing currency headwinds. Pricing pressure in Southern Europe and sluggish demand from beer customers also exerted pressure on the earnings expectations. The free cash flow target for 2015 was also lowered from $300M to $250M. The EPS guidance for 2Q15 stands at $0.55-$0.60, short of expectations. "While we continue to view the stock as attractively priced relative to the historical range and its peers, we believe the mounting macro headwinds will continue to overshadow potential catalysts and keep meaningful share appreciation constrained," Coleman said. The outlook announced by Owens-Illinois exhibiting currency headwinds in 2015 is "a negative read" for its rigid container peers -

(rated Neutral),

(rated Buy) and

(rated Underperform).