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Analysts Slash Estimates For Owens Corning Following Pre-Announcement


Analysts slashed their earnings estimates for Owens Corning (NYSE: OC) after the company said roofing volumes for the first half of 2014 may be as much as 20 percent lower than a year earlier.

MKM Partners' Megan McGrath said the revised outlook made her "Incrementally more cautious." She recommended "remaining on the sidelines for now."

McGrath maintained a Neutral rating and a $36 target.

"We'd like more color on the market dynamics before making any assumptions beyond the second quarter" of 2014," said McGrath, cutting her second quarter earnings estimate from $0.80 to $0.43 and full-year outlook from $2.39 to $1.94.

Jefferies' Philip Ng is more positive; he maintained a Buy rating, but he likewise slashed an estimate for second-quarter earnings from $0.78 to $0.49 per share, and 2014 EPS from $2.32 to $1.97.

Ng's target is now $49, down from $51.

"The shortfall in roofing volume has been driven by an inventory build by distributors," Ng said in a research note. "But our view on the stock is largely unchanged and we believe the risk-reward is still biased to the upside."

Roofing weakness may also stem from lousy weather and a slow start to spring construction season, according to Alex Rygiel of FBR. Rygiel maintained an Outperform rating on Owens Corning, but cut his price target from $50 to $46.

Rygiel said the company has also seen raw material prices rise within its roofing segment. But its composites and insulation segments "appear to be on plan."

Owens Corning, which is slated to post earnings July 23, opened sharply lower Monday. It recently traded at $39.12 per share, up 0.81 percent.

Latest Ratings for OC

Mar 2021Wolfe ResearchInitiates Coverage OnPeer Perform
Mar 2021Truist SecuritiesMaintainsBuy
Mar 2021Goldman SachsDowngradesBuySell

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Posted-In: Alex Rygiel FBR Jefferies Megan McGrath MKM Partners Philip NgAnalyst Color Analyst Ratings

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