Core Viewpoint - Brokerage recommendations, particularly for Owens Corning (OC), suggest a favorable outlook, but reliance solely on these recommendations may not be prudent due to potential biases and misalignment with retail investors' interests [5][10]. Brokerage Recommendation Summary - Owens Corning has an average brokerage recommendation (ABR) of 1.81, indicating a consensus between Strong Buy and Buy, with 56.3% of recommendations being Strong Buy and 6.3% being Buy [2]. - The ABR is based on recommendations from 16 brokerage firms, with nine Strong Buy and one Buy [2]. Analysis of Brokerage Recommendations - Brokerage analysts tend to exhibit a strong positive bias in their ratings, often issuing five Strong Buy recommendations for every Strong Sell, which may mislead investors [6][10]. - The interests of brokerage firms may not align with those of retail investors, suggesting that brokerage recommendations should be used to validate independent analyses rather than as standalone guidance [7]. Zacks Rank Comparison - The Zacks Rank, a proprietary stock rating tool, is considered a more reliable indicator of near-term price performance, based on earnings estimate revisions, and is distinct from the ABR [8][9]. - The Zacks Rank is updated more frequently and reflects timely changes in earnings estimates, while the ABR may not always be current [12]. Current Earnings Estimates for Owens Corning - The Zacks Consensus Estimate for Owens Corning's earnings has decreased by 1.8% over the past month to $14.33, indicating growing pessimism among analysts regarding the company's earnings prospects [13]. - This decline in earnings estimates has contributed to a Zacks Rank of 4 (Sell) for Owens Corning, suggesting caution despite the favorable ABR [14].

In the latest trading session, Owens Corning (OC) closed at $138.21, marking a -1.44% move from the previous day. This change lagged the S&P 500's daily loss of 0.17%. Meanwhile, the Dow lost 0.39%, and the Nasdaq, a tech-heavy index, lost 0.05%.Prior to today's trading, shares of the construction materials company had lost 3.33% over the past month. This has was narrower than the Construction sector's loss of 5.56% and the S&P 500's loss of 3.94% in that time.The investment community will be paying close a ...

Core Viewpoint - The average brokerage recommendation (ABR) for Owens Corning (OC) is 1.81, indicating a consensus between Strong Buy and Buy, based on 16 brokerage firms' recommendations [2] Brokerage Recommendations - The current ABR of 1.81 is derived from nine Strong Buy and one Buy recommendations, which account for 56.3% and 6.3% of all recommendations respectively [2] - Despite the positive ABR, reliance solely on brokerage recommendations for investment decisions may not be prudent, as studies show limited success in guiding investors towards stocks with the best price increase potential [5] Analyst Bias and Reliability - Brokerage analysts often exhibit a strong positive bias in their ratings due to vested interests, with a ratio of five Strong Buy recommendations for every Strong Sell [6] - This misalignment of interests can lead to misleading insights regarding a stock's future price movement [7] Zacks Rank Comparison - Zacks Rank, a proprietary stock rating tool, categorizes stocks from Strong Buy to Strong Sell and is based on earnings estimate revisions, which are more effective indicators of near-term stock price performance [8][11] - The ABR is calculated solely from brokerage recommendations and may not be up-to-date, while Zacks Rank reflects timely earnings estimate revisions [9][12] Current Earnings Estimates for Owens Corning - The Zacks Consensus Estimate for Owens Corning has declined by 0.6% over the past month to $14.51, indicating growing pessimism among analysts regarding the company's earnings prospects [13] - This decline in earnings estimates has resulted in a Zacks Rank of 4 (Sell) for Owens Corning, suggesting caution despite the Buy-equivalent ABR [14]

Core Viewpoint - Brokerage recommendations, while influential, may not accurately guide investors in selecting stocks with the highest potential for price appreciation, as seen in the case of Owens Corning (OC) [4][5][9]. Brokerage Recommendations for Owens Corning - Owens Corning has an average brokerage recommendation (ABR) of 1.87, indicating a consensus between Strong Buy and Buy, based on 15 brokerage firms [2]. - Out of the 15 recommendations, eight are Strong Buy (53.3%) and one is Buy (6.7%) [2]. Limitations of Brokerage Recommendations - Brokerage firms often exhibit a positive bias in their ratings due to vested interests, leading to a higher number of favorable ratings compared to negative ones [5][9]. - The ABR may not be timely or reflective of the latest market conditions, which can mislead investors [11]. Zacks Rank as an Alternative Indicator - The Zacks Rank, which is based on earnings estimate revisions, is presented in whole numbers and is considered a more reliable indicator of near-term stock performance compared to ABR [7][8]. - Recent trends indicate that the Zacks Consensus Estimate for Owens Corning has declined by 8% to $14.59, reflecting analysts' pessimism about the company's earnings prospects [12]. Current Zacks Rank for Owens Corning - Owens Corning currently holds a Zacks Rank of 4 (Sell), suggesting that the positive ABR should be approached with caution [13].

Core Viewpoint - Home Depot's prospects are closely tied to home improvement spending and the housing market, leading investors to consider alternative stocks like Whirlpool, Stanley Black & Decker, and Owens Corning for potentially better returns [1]. Valuation and Financial Metrics - Home Depot has a dividend yield of 2.4% and a price-to-earnings (PE) ratio of 26 times trailing earnings and 23.5 times estimated earnings in 2027 [2]. - Analyst consensus predicts 1% EPS growth for Home Depot in 2025, followed by 10% in 2026 [5]. - PE ratios for 2024, 2025, and 2026 for Whirlpool, Stanley Black & Decker, and Owens Corning are as follows: - Whirlpool: 8.1, 10.2, 8.7 [6] - Stanley Black & Decker: 19.3, 16, 12.8 [6] - Owens Corning: 9.3, 10.1, 9.1 [6] Company-Specific Insights - **Whirlpool**: - Market cap of $5.6 billion with $6.6 billion in net debt, planning to pay down $700 million of debt this year [7]. - Expected to generate $500 million to $600 million in free cash in 2025, with potential cash from reducing its stake in Whirlpool India [8]. - **Stanley Black & Decker**: - Successfully met key guidance metrics last year, focusing on cost-cutting and supply chain reorganization [9]. - Concerns include a high inventory-to-sales ratio and potential tariff impacts [10]. - **Owens Corning**: - Recently acquired Masonite for $3.9 billion, enhancing its position in the residential housing market [11]. - Generated $1.2 billion in free cash flow in a weak market, with an adjusted EBITDA margin of 25% [12][13]. Investment Outlook - Whirlpool is seen as a high-risk, high-reward investment [14]. - Stanley Black & Decker is on a recovery path but faces uncertainties regarding tariffs and inventory [14]. - Owens Corning is viewed as the best positioned for risk/reward, especially for those anticipating a housing market recovery [14].

Company Performance - Owens Corning's stock closed at $154.04, with a daily increase of +1.3%, underperforming the S&P 500's gain of 1.59% [1] - The stock has decreased by 20.31% over the past month, compared to a 9.68% loss in the Construction sector and a 2.42% loss in the S&P 500 [1] Earnings Forecast - The upcoming earnings release is expected to show an EPS of $3, reflecting a 16.43% decrease from the same quarter last year [2] - Revenue is projected to be $2.53 billion, indicating a 9.82% increase year-over-year [2] Full Year Estimates - Analysts forecast earnings of $15.03 per share and revenue of $10.74 billion for the full year, representing changes of -5.53% and -2.1% from the previous year [3] - Recent estimate revisions are seen as indicators of the company's business outlook [3] Zacks Rank and Valuation - Owens Corning currently holds a Zacks Rank of 5 (Strong Sell), with a consensus EPS projection that has decreased by 5.16% in the last 30 days [5] - The company has a Forward P/E ratio of 10.11, which is lower than the industry average of 17.05, suggesting it is trading at a discount [6] Industry Context - The Building Products - Miscellaneous industry, part of the Construction sector, has a Zacks Industry Rank of 199, placing it in the bottom 21% of over 250 industries [8] - The average PEG ratio for Owens Corning is 2.38, compared to the industry average of 1.79 [7]

Group 1 - The article highlights Owens Corning (NYSE: OC) as a stable investment following its acquisition of Masonite, emphasizing the company's transformation and strategic focus on ESG, insulation, and energy transition [1] - The investment group "Value In Corporate Events" provides members with opportunities to capitalize on significant corporate events such as IPOs, mergers & acquisitions, and earnings reports, covering around 10 major events monthly [1]

Owens Corning (OC) reported impressive results for fourth-quarter 2024, wherein earnings and net sales surpassed the Zacks Consensus Estimate, given the success of its strategic initiatives and structural improvements, leading to strong cash flow and higher margins despite challenging market conditions. This marks the eighth consecutive earnings beat for the company.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The company successfully executed strategic initiatives, including acqui ...

Financial Data and Key Metrics Changes - In Q4 2024, Owens Corning reported revenue of $2.8 billion, up 23% year-over-year, with an adjusted EBIT margin of 15% and an adjusted EBITDA margin of 22% [15][16] - For the full year 2024, revenues reached $11 billion, a 13% increase, with adjusted EBIT of $2 billion and adjusted EBITDA of $2.7 billion [16][34] - Adjusted earnings per diluted share for Q4 were $3.22, consistent with the prior year, while full-year adjusted earnings per diluted share increased by 10% to $15.91 [34][36] - Free cash flow for the year was $1.2 billion, an increase of over $50 million from the prior year, with a free cash conversion rate of 89% of adjusted earnings [36][38] Business Line Data and Key Metrics Changes - The roofing business generated Q4 sales of $912 million, slightly down from the prior year, with EBIT of $280 million and EBIT margins of 31% [40][42] - Insulation business revenues for Q4 were $926 million, in line with the prior year, with EBIT of $155 million and EBIT margins of 17% [47][48] - The Doors business reported Q4 revenue of $564 million, with EBIT of $29 million and an EBIT margin of 5% [50][51] - The composites business had Q4 sales of $515 million, with EBIT of $47 million, reflecting a year-over-year increase [58][59] Market Data and Key Metrics Changes - The US asphalt shingle market volume increased by 1% year-over-year, with strong demand in Florida, the Southwest, and Southeast [41] - The insulation business experienced demand headwinds outside the US, particularly in Europe and Asia, impacting overall revenue [49][135] - The overall market conditions in Europe are expected to remain challenging but stable, similar to the second half of 2024 [68] Company Strategy and Development Direction - Owens Corning executed three major strategic moves in 2024: the acquisition of Masonite, the sale of its building materials business in Asia, and the sale of its glass reinforcements business [12][22] - The company is focusing on expanding its capacity in profitable product lines and modernizing manufacturing facilities to strengthen market positions [24][27] - The strategic review of the glass reinforcements business concluded with an agreement to sell it to Pranic Group, allowing Owens Corning to focus on residential and commercial building products [55][56] Management's Comments on Operating Environment and Future Outlook - Management expects mixed opportunities in residential and commercial end markets as 2025 begins, with stable demand for non-discretionary repair activity in roofing [67][68] - The company anticipates Q1 2025 revenue growth of mid-20% compared to the prior year, with EBITDA expected to deliver low 20% growth [69] - Management highlighted the importance of disciplined capital allocation and maintaining an investment-grade balance sheet while pursuing growth [78] Other Important Information - Owens Corning returned 51% of free cash flow to shareholders in 2024, marking the eleventh consecutive year of increasing dividends [17][36] - The company plans to host an investor day in May 2025 to discuss its strategy and financial goals [79] Q&A Session Summary Question: Potential tariff impacts and mitigation strategies - Management indicated that tariff exposure is about 5% or less of total costs, with a significant portion being local production for local customers [88][90] Question: Pricing trends in residential markets - Management noted good pricing trends in core residential insulation and roofing businesses, with expectations for continued positive price realization [95][100] Question: Revenue contribution from new segments - Management expects revenue from new segments to be consistent across the year, with some seasonality in nonwoven products [106] Question: Capacity coming online in roofing - Management anticipates a positive mix shift towards laminate shingles, which should enhance margins [114][116] Question: Impact of new roofing capacity on industry margins - Management believes that the addition of new capacity will allow for better service to customer demand without negatively impacting margins [128][129] Question: Utilization rates across technical footprint - Management reported healthy utilization rates in North America, with challenges primarily in international markets [135]

Key TakeawaysSales of Owens Corning's legacy products slumped and the company warned of business headwinds ahead.The maker of insulation and other building materials anticipates near-term softness in residential construction and remodeling and North American commercial construction.The company beat earnings and revenue estimates for the fourth quarter. Owens Corning (OC) shares fell 4% Monday as the maker of insulation and other building materials saw a drop in demand for its legacy products and warned of b ...