Owens Corning
OC
$148.06
+0.61%
Owens Corning is a global building products company that manufactures and sells roofing systems, insulation products, and doors, primarily serving the residential and commercial construction markets. As a market leader in the North American roofing and insulation sectors, the company differentiates itself through its iconic brand, vertically integrated operations, and a strong focus on innovation and sustainability. The current investor narrative centers on a potential acquisition by Carlisle, which drove a sharp stock surge in early July, alongside ongoing concerns about housing demand and margin pressures from raw material costs. The stock has also been buoyed by a broader recovery in the construction sector, but the sustainability of this momentum remains a key debate.…
OC
Owens Corning
$148.06
Related headlines
Investment Opinion: Should I buy OC Today?
Based on the analysis, OC is rated a Buy with a target price of $175.57, implying 18.6% upside. The thesis is that the stock is undervalued relative to its forward earnings potential and historical valuation, with a potential acquisition catalyst. The consensus recommendation is Buy with a mean rating of 1.75, and the stock trades at a forward PE of 12.28x, a PEG of 0.10, and a PS of 0.92x, all below historical averages. The company's free cash flow of $480M and strong brand position support a recovery scenario. However, the rating is contingent on the Carlisle acquisition or a stabilization in housing demand. If the deal falls through and revenue continues to decline, the stock could drop to the 52-week low of $97.53, a 34% downside. The rating would upgrade to Strong Buy if the acquisition is confirmed, or downgrade to Hold if Q2 2026 revenue declines more than 15% YoY. Overall, OC is fairly valued to slightly undervalued relative to its history, but the high debt and earnings volatility warrant caution.
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OC 12-Month Price Forecast
The AI assessment is neutral with medium confidence. The stock's valuation is attractive, but the deteriorating fundamentals and high leverage create significant risk. The potential acquisition provides upside, but its uncertainty caps the bullish case. If the acquisition is confirmed or revenue growth resumes, the stance would upgrade to bullish. Conversely, if the deal fails and losses widen, the stance would turn bearish. The key is to monitor Q2 2026 earnings and any news on the Carlisle deal.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Owens Corning's 12-month outlook, with a consensus price target around $175.57 and implied upside of +18.6% versus the current price.
Average Target
$175.57
0 analysts
Implied Upside
+18.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$140 - $198
Analyst target range
The stock is covered by 14 analysts, with a consensus recommendation of 'Buy' and a mean rating of 1.75 (where 1 is strong buy and 5 is sell). The average target price is $175.57, implying an upside of 18.6% from the current price of $148.06. The target range is $140.00 to $198.00, with the low target suggesting a potential downside of 5.4% and the high target implying a 33.7% upside. The wide spread indicates high uncertainty, but the overall sentiment is bullish, with recent upgrades from Evercore ISI and Deutsche Bank, and no downgrades in the past three months.
Bulls vs Bears: OC Investment Factors
Owens Corning presents a mixed picture: strong analyst support and attractive valuation metrics contrast with deteriorating fundamentals. The bull case relies on a potential Carlisle acquisition and a housing recovery, while the bear case highlights revenue declines, margin compression, and negative earnings. Currently, the bearish evidence is stronger due to concrete financial deterioration, but the acquisition premium and low valuation provide a floor. The key tension is whether the Carlisle deal materializes—if it does, the stock could re-rate significantly; if not, the stock may drift toward its 52-week low. Investors should weigh the 18.6% analyst upside against the 5.4% downside to the low target, with the outcome hinging on deal certainty and housing demand.
Bullish
- Analyst consensus Buy with 18.6% upside: 14 analysts rate OC a Buy with a mean rating of 1.75 and an average target of $175.57, implying 18.6% upside from $148.06. Recent upgrades from Evercore ISI and Deutsche Bank reinforce positive sentiment.
- Forward PE of 12.3x suggests undervaluation: With a forward PE of 12.28x and a PEG ratio of 0.10, the market expects earnings recovery, making the stock look cheap relative to growth. This is well below the industry average forward PE, indicating potential upside.
- PS ratio at historical low of 0.92x: The current PS ratio of 0.92x is near the historical low of 2.8x, suggesting the stock is trading at a significant discount to its own history. This could signal a value opportunity if fundamentals stabilize.
- Strong 3-month momentum with 26.1% gain: OC has surged 26.1% over the past 3 months, outperforming the S&P 500 by 23.4 percentage points. This momentum is supported by the Carlisle acquisition speculation and improving housing market sentiment.
Bearish
- Revenue declining 10.5% YoY in Q1 2026: Q1 2026 revenue fell to $2.265B, a 10.5% drop from the prior year, with sequential declines from Q2 2025's $2.747B. This indicates weakening demand in roofing and insulation markets.
- Net losses in three of last four quarters: OC reported net losses of $105M, $297M, and $494M in Q1 2026, Q4 2025, and Q3 2025 respectively, with only Q2 2025 profitable at $363M. This volatility raises concerns about earnings stability.
- Gross margin compressed to 22.9%: Gross margin fell from 31.6% in Q2 2025 to 22.9% in Q1 2026, reflecting higher raw material costs and lower volumes. This margin pressure could persist if input costs remain elevated.
- High debt-to-equity ratio of 1.60: With a debt-to-equity ratio of 1.60, OC carries significant leverage, increasing financial risk. Interest expenses of $66M in Q1 2026 add to fixed costs, straining profitability during downturns.
OC Technical Analysis
Owens Corning's stock has demonstrated a robust recovery over the past year, with a 1-year price change of -0.3%, essentially flat, but a significant 3-month gain of 26.1% and a 6-month gain of 11.6%. The current price of $148.06 sits at 92.6% of its 52-week range (between $97.53 and $159.91), indicating the stock is trading near its highs, which suggests strong momentum but also potential overextension. The stock's beta of 1.325 indicates it is 32.5% more volatile than the market, which is important for risk assessment.
Beta
1.32
1.32x market volatility
Max Drawdown
-37.7%
Largest decline past year
52-Week Range
$98-$160
Price range past year
Annual Return
-0.3%
Cumulative gain past year
| Period | OC Return | S&P 500 |
|---|---|---|
| 1m | +5.9% | +3.6% |
| 3m | +26.1% | +2.7% |
| 6m | +11.6% | +11.4% |
| 1y | -0.3% | +18.7% |
| ytd | +29.7% | +12.3% |
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OC Fundamental Analysis
Owens Corning's revenue has been volatile, with the most recent quarter (Q1 2026) showing revenue of $2.265 billion, a 10.5% decline year-over-year. This follows a pattern of mixed results: Q4 2025 revenue was $2.142 billion, Q3 2025 was $2.684 billion, and Q2 2025 was $2.747 billion, indicating a decelerating trend. The company's net income has been negative in recent quarters, with Q1 2026 net loss of $105 million, Q4 2025 loss of $297 million, and Q3 2025 loss of $494 million, though Q2 2025 was profitable at $363 million. Gross margin has compressed from 31.6% in Q2 2025 to 22.9% in Q1 2026, reflecting cost pressures and lower volumes.
Quarterly Revenue
$2.3B
2026-03
Revenue YoY Growth
-10.5%
YoY Comparison
Gross Margin
22.9%
Latest Quarter
Free Cash Flow
$480000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is OC Overvalued?
Given the negative trailing EPS, the price-to-sales (PS) ratio is the primary valuation metric, currently at 0.92x, which is below the industry average of 1.2x, indicating a potential discount. The forward PE of 12.28x suggests the market expects a return to profitability, with a PEG ratio of 0.10, implying undervaluation relative to growth. Historically, the PS ratio has ranged from 2.8x to 7.3x over the past few years, so the current 0.92x is near the historical low, suggesting the stock is trading at a significant discount to its own history, which could indicate a value opportunity or reflect deteriorating fundamentals.
PE
-17.9x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 4x~16x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
15.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financially, OC faces elevated risks from its debt load (debt-to-equity of 1.60) and negative earnings in recent quarters. The company reported a net loss of $105M in Q1 2026, following losses in Q4 and Q3 2025, with only Q2 2025 profitable. Gross margin compression from 31.6% to 22.9% over the past year indicates cost pressures that could persist. Additionally, revenue declined 10.5% YoY in Q1 2026, suggesting weakening demand. The high leverage amplifies the impact of margin declines, as interest expenses of $66M per quarter consume cash flow. If losses continue, the company may face liquidity constraints, though current free cash flow of $480M provides some buffer.
FAQ
The key risks are: 1) Financial risk from high debt (debt-to-equity 1.60) and negative earnings, which could lead to liquidity issues if losses persist. 2) Market risk from high beta (1.325) and sensitivity to housing demand, which is affected by mortgage rates and economic conditions. 3) Competitive risk from raw material cost inflation and competition in the building materials sector. 4) Company-specific risk from the potential failure of the Carlisle acquisition, which could cause the stock to drop to the 52-week low of $97.53. The most severe risk is a combination of falling revenue and rising costs, leading to prolonged losses and a potential debt downgrade.
The 12-month forecast is mixed. The base case (45% probability) sees the stock reaching the analyst average target of $175.57, driven by a stable recovery. The bull case (30% probability) targets $198 if the Carlisle acquisition succeeds or housing demand surges. The bear case (25% probability) sees the stock falling to $140 or lower if the deal fails and fundamentals worsen. The most likely scenario is the base case, assuming revenue stabilizes and margins improve. However, the wide target range ($140-$198) reflects high uncertainty. Investors should watch Q2 2026 earnings and any news on the acquisition to refine the forecast.
OC appears undervalued based on several metrics. The PS ratio of 0.92x is well below the industry average of 1.2x and the stock's historical range of 2.8x to 7.3x. The forward PE of 12.28x is also low, and the PEG ratio of 0.10 suggests the stock is cheap relative to expected growth. However, the trailing PE is negative due to losses, indicating that the market is pricing in a recovery. The valuation implies that investors expect earnings to rebound, but if the recovery is delayed, the stock could be fairly valued or even overvalued. Overall, the market is pricing in a moderate recovery, and the stock is trading at a discount to its own history, making it undervalued on a forward basis.
OC is a good buy for investors with a medium-to-high risk tolerance, given the 18.6% upside to the average analyst target of $175.57. The stock trades at a forward PE of 12.28x and a PS of 0.92x, which are below historical averages, suggesting undervaluation. However, the company has posted losses in three of the last four quarters, and revenue is declining, so the risk of further downside exists. The potential Carlisle acquisition is a wildcard that could provide a significant premium, but it is not guaranteed. If you believe in a housing recovery and can stomach volatility, OC offers a favorable risk/reward, but it is not suitable for conservative investors.
OC is more suitable for short-to-medium-term investment given its cyclical nature and high volatility (beta 1.325). The stock has a dividend yield of 2.48%, but the payout ratio is negative, indicating the dividend may be at risk. For long-term investors, the company's strong brand and market position in roofing and insulation could provide value, but the cyclicality and debt load make it a riskier hold. A minimum holding period of 12-18 months is recommended to allow for a potential housing recovery and resolution of the acquisition speculation. Short-term traders could benefit from the volatility, but the stock's 3-month gain of 26.1% suggests it may be overbought in the near term.